Labor Relations

Case Assignment#2

1. Espino vs. NLRC

240 SCRA 52
-
Petitioner Leslie W. Espino was the Exec. Vice President-Chief Operating Officer
of respondent Phil Airlines (PAL) when his service was terminated in 1990 as a
result of the findings of the panels created by then President Corazon C. Aquino
to investigate the administrative charges filed against him.
-
It appears that petitioner and other several senior officers of PAL were charged
for their involvement in 4 cases, labeled as “Goldair,” “Robelle,”
“Kabash/Primavera,” and “Middle East.”
-
The PAL Board of Directors issued separate resolutions wherein Espino was
considered resign from the service effective immediately for loss of confidence.
-
Espino filed a complaint for “illegal dismissal” against PAL with the NLRC,
Arbitration Branch, NCR.
-
PAL argued that board resolutions cannot be reviewed by the NLRC and that the
recourse of the petitioner Espino should have been addressed by way of appeal, to
the Office of the President.
-
Labor Arbiter Cresencio J. Ramos rendered a decision in favor of petitioner
Espino.
-
PAL asserted that the Labor Arbiter’s decision is null and void for lack of
jurisdiction over the subject matter as it is the SEC, and not the NLRC which has
jurisdiction over involving dismissal or removal of corporate officers.
-
NLRC promulgated a resolution and this time ruled in favor of PAL on the
ground of lack of jurisdiction.
-
Petitioner Espino contended that it is the NLRC that has jurisdiction over the case
as it involves the termination of a regular employee and involves claim for
backwages and other benefits and damages

Issue: Whether the NLRC has jurisdiction over the complaint filed by the
petitioner for illegal dismissal. NO

Ruling: The fact that petitioner sought payment of his backwages, other
benefits, as well as moral and exemplary damages and attorney's fees in his
complaint for illegal dismissal will not operate to prevent the SEC from
exercising its jurisdiction under PD 902-A. While the affirmative reliefs and
monetary claims sought by petitioner in his complaint may, at first glance,
mislead one into placing the case under the jurisdiction of the Labor Arbiter, a
closer examination reveals that they are actually part of the perquisites of his
elective position; hence, intimately linked with his relations with the
corporation.

In Dy v. NLRC, et al.,  the Court, confronted with the same issue ruled, thus:
9
 The question of remuneration, involving as it does, a person who is not a
mere employee but a stockholder and officer, an integral part, it might be
said, of the corporation, is not a simple labor problem but a matter that
comes within the area of corporate affairs and management, and is in fact a
corporate controversy in contemplation of the Corporation Code.

The Court has likewise ruled in the case of Andaya v. Abadia   that in
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intra-corporate matters, such as those affecting the corporation, its directors, trustees,
officers and shareholders, the issue of consequential damages may just as well be resolved
and adjudicated by the SEC. Undoubtedly, it is still within the competence and expertise of
the SEC to resolve all matters arising from or closely connected with all intra-corporate
disputes.

A corporate officer may at the same time be an employee because a corporation can
engage its corporate officers to perform services which are under such circumstance would
make those corporate officers, employees. 

2. Mainland Construction Co. etc vs. Movilla, et. al.

G.R. No. 118088, November 23, 1995

Facts: Mainland Construction Co., Inc. is a domestic corporation, duly organized and
existing under Philippine laws, having been issued a certificate of registration by the
SEC
Its principal line... of business is the general construction of roads and bridges and
the operation of a service shop for the maintenance of equipment.  Respondents on
the other hand, are the surviving heirs of complainant, Ernesto Movilla, who died
during the pendency of the action with the Labor Arbiter.
Records show that Ernesto Movilla, who was a Certified Public Accountant during his
lifetime, was hired as such by Mainland in 1977.  Thereafter, he was promoted to the
position of Administrative Officer with a monthly salary of P4,700.00.
Ernesto Movilla, recorded as receiving a fixed salary of P4,700.00 a month, was
registered with the Social Security System (SSS) as an employee of petitioner
corporation.  His contributions to the SSS, Medicare and Employees Compensation
Commission (ECC) were deducted from... his monthly earnings by his said
employer.
On April 12, 1987, during petitioner corporation's annual meeting of stockholders, the
following were elected members of the Board of Directors, viz:  Robert L.
Carabuena, Ellen L. Carabuena, Lucita Lu Carabuena, Martin G. Lu and Ernesto L.
Movilla.
On the same day, an organizational meeting was held and the Board of Directors
elected Ernesto Movilla as Administrative Manager.[3] He occupied the said position
up to the time of his death.
On April 2, 1991, the
DOLE... conducted a routine inspection on petitioner corporation and found that it
committed such irregularities in the conduct of its business as:
"1. Underpayment of wages under R.A. 6727 and RTWPB-XI-01;
2. Non-implementation of Wage Order No. RTWPB-XI-02;
3. Unpaid wages for 1989 and 1990;
4. Non-payment of holiday pay and service incentive leave pay; and
 5. Unpaid 13th month pay (remaining balance for "1990."[4]
On the basis of this finding, petitioner corporation was ordered by DOLE to pay to its
thirteen employees, which included Movilla, the total amount of P309,435.89,
representing their salaries, holiday pay, service incentive leave pay differentials,
unpaid wages and 13th month... pay.
All the employees listed in the DOLE's order were paid by petitioner corporation,
except Ernesto Movilla.
On October 8, 1991, Ernesto Movilla filed a case against petitioner corporation
and/or Lucita, Robert, and Ellen, all surnamed Carabuena, for unpaid wages,
separation pay and attorney's fees, with the Department of Labor and Employment,
Regional Arbitration, Branch XI, Davao
City.
On February 29, 1992, Ernesto Movilla died while the case was being tried by the
Labor Arbiter and was promptly substituted by his heirs, private respondents herein,
with the consent of the Labor Arbiter.
The Labor Arbiter rendered judgment on June 26, 1992, dismissing the complaint on
the ground of lack of jurisdiction.  Specifically, the Labor Arbiter made the following
ratiocination:
"It is clear that in the case at bar, the controversy presented by complainant is intra-
corporate in nature and is within the jurisdiction of the Securities and Exchange
Commission, pursuant to P.D. 902-A (Phil. School of Business Administration, et al.
v. Leano,... G.R. No. L-58468, February 24, 1984; Dy et al. v. NLRC, et al., G.R. No.
L-68544, October 27, 1986).  What Movilla is claiming against respondents are his
alleged unpaid salaries and separation pay as Administrative Manager of the
corporation for which position he was... appointed by the Board of Directors.  His
claims therefore fall under the jurisdiction of the Securities and Exchange
Commission because this is not a simple labor problem; but a matter that comes
within the area of corporate affairs and management, and is in fact a... corporate
controversy in contemplation of the Corporation Code.  (Fortune Cement Corporation
v. NLRC, et al., G.R No. 79762, January 24, 1991)."[5]
Aggrieved by this decision, respondents appealed to the National Labor Relations
Commission (NLRC).  The NLRC ruled that the issue in the case was one which
involved a labor dispute between an employee and petitioner corporation and, thus,
the NLRC had jurisdiction to... resolve the case.

Issue: WON the NLRC or the SEC — has jurisdiction over the controversy. NLRC

In order that the SEC can take cognizance of a case, the controversy must pertain to any of
the following relationships: a) between the corporation, partnership or association and the
public; b) between the corporation, partnership or association and its stockholders, partners,
members or officers;
c) between the corporation, partnership or association and the State as far as its franchise,
permit or license to operate is concerned; and d) among the stockholders, partners or
associates themselves.  The fact that the parties involved in the controversy are all
7

stockholders or that the parties involved are the stockholders and the corporation does not
necessarily place the dispute within the ambit of the jurisdiction of SEC. The better policy to
be followed in determining jurisdiction over a case should be to consider concurrent factors
such as the status or relationship of the parties or the nature of the question that is the
subject of their controversy.  In the absence of any one of these factors, the SEC will not
8

have jurisdiction. Furthermore, it does not necessarily follow that every conflict between the
corporation and its stockholders would involve such corporate matters as only the SEC can
resolve in the exercise of its adjudicatory or quasi-judicial powers.
9
In the case at bench, the claim for unpaid wages and separation pay filed by the
complainant against petitioner corporation involves a labor dispute. It does not
involve an intra-corporate matter, even when it is between a stockholder and a
corporation. It relates to an employer-employee relationship which is distinct from the
corporate relationship of one with the other. Moreover, there was no showing of any
change in the duties being performed by complainant as an Administrative Officer and
as an Administrative Manager after his election by the Board of Directors. What comes
to the fore is whether there was a change in the nature of his functions and not merely
the nomenclature or title given to his job.

As correctly ruled by the NLRC:

The claims for unpaid salaries/monetary benefits and separation pay, are not
a corporate conflict as respondents presented them to be. If complainant is
not an employee, respondent should have contested the DOLE inspection
report, What they did was to exclude complainant from the order of payment .
. . and worse, he was not both given responsibilities and paid his salaries for
the succeeding months . . . . This is a clear case of constructive dismissal
without due process . . .
12

The existence of an employer-employee relationship is a factual question and public

respondent's findings are accorded great weight and respect as the same are supported by
substantial evidence.  Hence, we uphold the conclusion of public respondent that
13

Ernesto Movilla was an employee of petitioner corporation.

It is pertinent to note that petitioner corporation is not prohibited from hiring its
corporate officers to perform services under a circumstance which will make him an
employee.  Moreover, although a director of a corporation is not, merely by virtue of
14

his position, its employee, said director may act as an employee or accept duties that
make him also an employee. 15

Since Ernesto Movilla's complaint involves a labor dispute, it is the NLRC, under
Article 217 of the Labor Code of the Philippines, which has jurisdiction over the case
at bench.

Ruling: The SC has jurisdiction over a complaint of an individual who is a

corporate officer and at the same time an employee of a corporation.
Factors to be determined:
1.Status or relationship of the parties
2.Nature of the question

3. Demetrio Ellao y Dela Vega vs. BATELEC, Raquel

Rowena Rodriguez
G.R. No. 209166, July 9, 2018

DOCTRINE: As a rule, the illegal dismissal of an officer or other employee of a private

employer is properly cognizable by the labor arbiter pursuant to Article 217 (a) of the
Labor Code, as amended.
By way of exception, where the complaint for illegal dismissal involves a corporate
officer, the controversy falls under the jurisdiction of the SEC, because the controversy
arises out of intra-corporate or partnership relations between and among stockholders,
members, or associates, or between any or all of them and the corporation, partnership,
or association of which they are stockholders, members, or associates, respectively; and
between such corporation, partnership, or association and the State insofar as the
controversy concerns their individual franchise or right to exist as such entity; or
because the controversy involves the election or appointment of a director, trustee,
officer, or manager of such corporation, partnership, or association. With the advent of
R.A. 8799 or The Securities Regulation Code, the SEC's jurisdiction over all
intracorporate disputes was transferred to the regional trial courts.

FACTS:
-
BATELEC I is an electric cooperative organized and existing under P.D. 269 and is
engaged in the business of distributing electric power or energy in the province
of Batangas.
-
While respondent Raquel Rowena Rodriguez is the President of BATELEC I's
Board of Directors.
-
Petitioner Ellao was employed by BATELEC I initially as Office Supplies and
Equipment Control Officer on January 4, 1982 until he was appointed as General
Manager on June 1, 2006.
-
a complaint was filed by Nestor de Sagun and Conrado Cornejo against petitioner
Ellao, charging him of committing irregularities 6 in the discharge of his functions
as General Manager.
-
A fact-finding body was created to investigate these charges and in the
meantime, Ellao was placed under preventive suspension.
-
Ellao submitted his explanation refuting the charges against him, after which the
matter was set for hearing.
-
However, the scheduled hearing was postponed at Ellao's instance. The re-
scheduled hearing did not push through, and instead, the fact-finding body
issued a report recommending Ellao's termination.
-
The BOD adopted and issued a Board Resolution terminating Ellao as General
Manager on the grounds of gross and habitual neglect of duties and
responsibilities and willful disobedience or insubordination resulting to loss of
trust and confidence.
-
Ellao filed a Complaint for illegal dismissal and money claims before the Labor
Arbiter against BATELEC I and/or its President Rowena A. Rodriguez. Alleging
illegal dismissal, Ellao complained that the charges against him were
unsubstantiated and that there was no compliance with procedural due process
as he was not afforded the opportunity to explain and there was no written
notice of termination specifying the grounds of his termination.
-
BATELEC on the other hand, moved to dismiss the complaint on the ground that
it is National Electrification Administration (NEA) and not the NLRC which has
jurisdiction over the complaint. It then interposed in its petition for certiorari
that Ellao is a corporate officer.
-
The CA found that Ellao is a corporate office because under BATELEC I's By-laws,
its Board of Directors is authorized to appoint such officers as it may deem
necessary. It noted that Ellao was appointed as General Manager by virtue of a
board resolution and that Ellao's appointment was duly approved by the NEA
Administrator.

ISSUE: Whether NLRC has jurisdiction over Ellao’s complaint for illegal dismissal?

RULING: NO. Complaints for illegal dismissal filed by a cooperative officer constitute an
intra-cooperative controversy, jurisdiction over which belongs to the regional trial
courts.
Ellao's main resistance to the regional trial court's exercise of jurisdiction over his
complaint for illegal dismissal rests on his theory that BATELEC I, as a cooperative, is not
a corporation registered with the SEC. Registration with the SEC, however, is not the
operative factor in determining whether or not the latter enjoys jurisdiction over a
certain dispute or controversy. organization under P.D. 269 sufficiently vests upon
electric cooperatives' juridical personality enjoying corporate powers. Registration with
the SEC becomes relevant only when a non-stock, nonprofit electric cooperative decides
to convert into and register as a stock corporation. in conformity with Section 25 of the
Corporation Code, "a position must be expressly mentioned in the By-Laws in order to
be considered as a corporate office. Thus, the creation of an office pursuant to or under
a By-Law enabling provision is not enough to make a position a corporate office”. The
only officers of a corporation were those given that character either by the Corporation
Code or by the By-Laws so much so that the rest of the corporate officers could be
considered only as employees or subordinate officials. The functions of the office of the
General Manager, i.e., management of the Cooperative and to keep the Board fully
informed of all aspects of the operations and activities of the Cooperative are
specifically laid down under BATELEC I's By-laws itself. It is therefore beyond cavil that
Ellao's position as General Manager is a cooperative office. Accordingly, his complaint
for illegal dismissal partakes of the nature of an intra-cooperative controversy; it
involves a dispute between a cooperative officer on one hand, and the Board of
Directors, on the other.

4. Maitling Industrial and Commercial Corporation vs.

Ricardo Coros
G.R. No. 157802, October 13, 2010

Facts:
-
After his dismissal by Matling as its Vice President for Finance and
Administration, the respondent filed on August 10, 2000 a complaint for illegal
suspension and illegal dismissal against Matling and some of its corporate
officers (petitioners) in the NLRC, Sub-Regional Arbitration Branch XII, Iligan City.
-
The petitioners moved to dismiss the complaint, raising the ground, among
others, that the complaint pertained to the jurisdiction of the Securities and
Exchange Commission (SEC) due to the controversy being intracorporate
inasmuch as the respondent was a member of Matlings Board of Directors aside
from being its Vice-President for Finance and Administration prior to his
termination. 
-
The respondent opposed the petitioners motion to dismiss, insisting that his
status as a member of Matlings Board of Directors was doubtful, considering that
he had not been formally elected as such; that he did not own a single share of
stock in Matling, considering that he had been made to sign in blank an undated
indorsement of the certificate of stock he had been given in 1992; that Matling
had taken back and retained the certificate of stock in its custody; and that even
assuming that he had been a Director of Matling, he had been removed as the
Vice President for Finance and Administration, not as a Director, a fact that the
notice of his termination dated April 10, 2000 showed.
-
On October 16, 2000, the LA granted the petitioners motion to dismiss, ruling
that the respondent was a corporate officer because he was occupying the
position of Vice President for Finance and Administration and at the same time
was a Member of the Board of Directors of Matling; and that, consequently, his
removal was a corporate act of Matling and the controversy resulting from such
removal was under the jurisdiction of the SEC, pursuant to Section 5, paragraph
(c) of Presidential Decree No. 902.

Issue: Whether or not the respondent is a corporate officer within the jurisdiction of the
regular courts. NO
RULING:

As a rule, the illegal dismissal of an officer or other employee of a private employer is

properly cognizable by the LA. Where the complaint for illegal dismissal concerns a
corporate officer, however, the controversy falls under the jurisdiction of the Securities
and Exchange Commission (SEC), because the controversy arises out of intra-corporate
or partnership relations between and among stockholders, members, or associates, or
between any or all of them and the corporation, partnership, or association of which
they are stockholders, members, or associates, respectively; and between such
corporation, partnership, or association and the State insofar as the controversy
concerns their individual franchise or right to exist as such entity; or because the
controversy involves the election or appointment of a director, trustee, officer, or
manager of such corporation, partnership, or association. Such controversy, among
others, is known as an intra-corporate dispute.

Effective on August 8, 2000, upon the passage of Republic Act No. 8799, otherwise
known as The Securities Regulation Code, the SEC’s jurisdiction over all intra-corporate
disputes was transferred to the RTC.

Under Sec. 25 of the Corporation Code, a position must be expressly mentioned in the
By-Laws in order to be considered as a corporate office. Thus, the creation of an office
pursuant to or under a By-Law enabling provision is not enough to make a position a
corporate office.

Here, respondent’s position of Vice President for Finance and Administration was not
expressly mentioned in the By-Laws; neither was the position of Vice President for
Finance and Administration created by Matling’s Board of Directors. Lastly, the
President, not the Board of Directors, appointed him.

In order to determine whether a dispute constitutes an intra-corporate controversy or

not, the Court considers two elements instead, namely: (a) the status or relationship
of the parties; and (b) the nature of the question that is the subject of their
controversy.

The criteria for distinguishing between corporate officers who may be ousted from
office at will, on one hand, and ordinary corporate employees who may only be
terminated for just cause, on the other hand, do not depend on the nature of the
services performed, but on the manner of creation of the office. In the respondent’s
case, he was supposedly at once an employee, a stockholder, and a Director of Matling.
The circumstances surrounding his appointment to office must be fully considered to
determine whether the dismissal constituted an intra-corporate controversy or a labor
termination dispute.

Obviously enough, the respondent was not appointed as Vice President for Finance and
Administration because of his being a stockholder or Director of Matling. He had started
working for Matling on September 8, 1966, and had been employed continuously for 33
years until his termination on April 17, 2000, first as a bookkeeper, and his climb in 1987
to his last position as Vice President for Finance and Administration had been gradual
but steady.

Even though he might have become a stockholder of Matling in 1992, his promotion to
the position of Vice President for Finance and Administration in 1987 was by virtue of
the length of quality service he had rendered as an employee of Matling. His subsequent
acquisition of the status of Director/stockholder had no relation to his promotion.
Besides, his status of Director/stockholder was unaffected by his dismissal from
employment as Vice President for Finance and Administration.

5. Sanyo Phils Workers Union vs. Canizares

211 SCRA 361
 PSSLU had an existing CBA with Sanyo. It provides that “all members of the union
covered by this agreement must retain their membership as condition of his/her
continued employment with the company.
 PSSLU, through its national president, informed Sanyo that the respondent
employees were notified that their membership with PSSLU were cancelled for
anti-union activities, economic sabotage, threats, coercion and intimidation,
disloyalty and for joining another union.
 On February 14, 1990, respondent executed a pledged of cooperation with
PSSLU promising cooperation with the latter union and among others,
respecting, accepting and honoring the CBA with Sanyo.
 On March 4, 1991, PSSLU through its national and local presidents, wrote
another letter to Sanyo recommending the dismissal of the respondent.
 The company received no information on whether or not said employees
appealed to PSSLU. Hence, it considered them dismissed as of March 23, 1991
 The dismissed employees filed a complaint with the NLRC for illegal dismissal. 
 PSSLU filed a motion to dismiss the complaint alleging that the Labor Arbiter was
without jurisdiction over the case. And that cases arising from the interpretation
or implementation of the collective bargaining agreements shall be disposed of
by the labor arbiter by referring the same to the grievance machinery and
voluntary arbitration.
 The complainants opposed the motion to dismiss complaint on these grounds: 1)
the series of conferences before the National Conciliation and Mediation Board
had been terminated; 2) the NLRC Labor Arbiter had jurisdiction over the case
which was a termination dispute pursuant to Article 217 (2) of the Labor Code;
and 3) there was nothing in the CBA which needs interpretation or
implementation
 LA held that it had jurisdiction over the case.

Issue: WON the labor arbiter has jurisdiction over the case. YES

Ruling:

In the instant case, both the union and the company are united or have come to an
agreement regarding the dismissal of private respondents. No grievance between
them exists which could be brought to a grievance machinery. The problem or dispute
in the present case is between the union and the company on the one hand and some
union and non-union members who were dismissed, on the other hand. The dispute
has to be settled before an impartial body. The grievance machinery with members
designated by the union and the company cannot be expected to be impartial against
the dismissed employees. Due process demands that the dismissed workers
grievances be ventilated before an impartial body. Since there has already been an
actual termination, the matter falls within the jurisdiction of the Labor Arbiter.
It is clear from Article 217 of the Labor Code which defines the jurisdiction of the Labor Arbiter
that termination cases fall under the jurisdiction of the Labor Arbiter. It should be noted however
that said article at the outset excepted from the said provision cases otherwise provided for in
other provisions of the same Code, thus the phrase "Except as otherwise provided under this
Code . . . ." Under paragraph (c) of the same article, it is expressly provided that "cases arising
from the interpretation or implementation of collective bargaining agreements and those arising
from the interpretation and enforcement of company personnel policies shall be disposed of by
the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as
may be provided in said agreements.

It was provided in the CBA executed between PSSLU and Sanyo that a member's voluntary
resignation from membership, willful refusal to pay union dues and his/her forming, organizing,
joining, supporting, affiliating or aiding directly or indirectly another labor union shall be a cause
for it to demand his/her dismissal from the company. The demand for the dismissal and the actual
dismissal by the company on any of these grounds is an enforcement of the union security clause
in the CBA. This act is authorized by law provided that enforcement should not be characterized
by arbitrariness (Manila Mandarin Employee Union v. NLRC, G.R. No. 76989, 29 Sept. 1987, 154
SCRA 368) and always with due process (Tropical Hut Employees Union v. Tropical Food
Market, Inc., L-43495-99, Jan. 20, 1990).

The reference to a Grievance Machinery and Voluntary Arbitrators for the adjustment or
resolution of grievances arising from the interpretation or implementation of their CBA and those
arising from the interpretation or enforcement of company personnel policies is mandatory. The
law grants to voluntary arbitrators original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or enforcement of company
personnel policies (Art. 261, Labor Code).

In the instant case, however, We hold that the Labor Arbiter and not the Grievance
Machinery provided for in the CBA has the jurisdiction to hear and decide the
complaints of the private respondents. While it appears that the dismissal of the
private respondents was made upon the recommendation of PSSLU pursuant to the
union security clause provided in the CBA, We are of the opinion that these facts do
not come within the phrase "grievances arising from the interpretation or
implementation of (their) Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies," the jurisdiction of
which pertains to the Grievance Machinery or thereafter, to a voluntary arbitrator or
panel of voluntary arbitrators. Article 260 of the Labor Code on grievance machinery
and voluntary arbitrator states that "(t)he parties to a Collective Bargaining Agreement
shall include therein provisions that will ensure the mutual observance of its terms and
conditions. They shall establish a machinery for the adjustment and resolution of
grievances arising from the interpretation or implementation of their Collective
Bargaining Agreement and those arising from the interpretation or enforcement of
company personnel policies." It is further provided in said article that the parties to a
CBA shall name or designate their respective representatives to the grievance
machinery and if the grievance is not settled in that level, it shall automatically be
referred to voluntary arbitrators (or panel of voluntary arbitrators) designated in
advance by the parties. It need not be mentioned that the parties to a CBA are the union
and the company. Hence, only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators.

6. Georg Grotjahn GMBH and Co. vs. Isnani

G.R. No. 109272, August 10, 1994

Facts:
Petitioner is a multinational corporation (employer).  Private
respondent Lanchinebre (employee) worked as its sales representative
from 1983 to mid-1992.  Employee obtained loans and cash advances,
a total of P12,170.37 remained unpaid. 

 
In July 1992, Employee filed an illegal suspension case with the NLRC
(NLRC Case).  Employer, on the other hand, filed a case for collection
of Sum of Money at the RTC (Collection Case).  Employee moved to
dismiss the collection case on the ground that the case was in the
nature of a claim for employee compensation (Art 217 No.4 & 6) and
was under the exclusive jurisdiction of the NLRC.  The RTC under
respondent judge dismissed the case. Hence this petition is for review.

Issue:
Whether or not the RTC has jurisdiction over the Collection Case.

Ruling: YES
Not every dispute between an employer and employee involves matters that only labor
arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial
powers. The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code
is limited to disputes arising from an employer-employee relationship which can only be
resolved by reference to the Labor Code, other labor statutes, or their collective bargaining
agreement.

The fact that they were employer and employee at the time of the transaction
does not negate the civil jurisdiction of the trial court. The case does not involve
adjudication of a labor dispute but recovery of a sum of money based on our civil
laws on obligation and contract. The issue cannot be resolved by reference to the
Labor Code or other labor statutes but by reference to the law on obligations and
contracts for which reason that the Labor Arbiter has no jurisdiction despite the
fact that the parties have ER-EE relationship. 

7. Montinola vs. Philippine Airlines

G.R. No. 198656, September 8, 2014

Facts:

-
Montinola was employed as a flight attendant of PAL since 1996.
-
On January 29, 2008, Montinola and other flight crew members were subjected
to custom searches in Honolulu, Hawaii, USA, where items from the airline were
recovered from the flight crew by customs officials.
-
Nancy Graham (Graham), US Customs and Border Protection Supervisor, sent an
email to PAL regarding the search.
-
PAL required Montinola to comment on the incident. This was followed by a
clarificatory hearing. PAL, however, found Montinola guilty of 11 Violations of
the company’s Code of Discipline and Government Regulation. She was meted
with suspension for one (1) year without pay. Montinola asked for a
reconsideration but was denied a month after.
 -
Montinola brought the matter before the Labor Arbiter. The Labor Arbiter found
her suspension illegal, finding that PAL never presented evidence that showed
Montinola as the one responsible for any of the illegally taken airline items. The
Labor Arbiter ordered Montinola’s reinstatement with backwages, inclusive of
allowances and benefits amounting to ₱378,630.00.
-
In addition, the Labor Arbiter awarded moral damages in the amount of
₱100,000.00 and exemplary damages amounting to ₱100,000.00. Attorney’s fees
were also awarded to Montinola because she was "forced to litigate and incur
expenses to protect her rights."
-
The Labor Arbiter’s decision was affirmed by the NLRC and Court of Appeals with
modification. The Court of Appeals deleted the moral and exemplary damages
and attorney’s fees stating that: “Relevant to the award of moral damages, not every employee who is
illegally dismissed or suspended is entitled to damages. Settled is the rule that moral damages are
recoverable only where the dismissal or suspension of the employee was attended by bad faith or fraud, or
constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public
policy. In the case at bar, there is no showing that PAL was moved by any ill will or motive in suspending
private respondent. It is evident that petitioner gave private respondent every opportunity to refute the
charges against her and to present her side as part of due process. These negate the existence of bad faith
on the part of petitioner. Under the circumstances, we hold that private respondent is not entitled to moral
damages and exemplary damages. Furthermore, the Court finds the award of attorney’s fees improper. The
award of attorney’s fees was merely cited in the dispositive portion of the decision without the RTC [sic]
stating any legal or factual basis for said award.”
-
Hence, this petition.

ISSUE: whether Montinola’s illegal suspension entitled her to an award of moral and
exemplary damages and attorney’s fees.

HELD: YES
In this case, there is a denial of procedural and substantial due process. Although PAL
complied with procedural due process as laid out in Article 277, paragraph (b) of the
Labor Code by issuing a written notice of administrative charge, conducting a
clarificatory hearing, and rendering a written decision suspending Montinola, the written
notice did not serve its purpose under due process. With Montinola unable to clarify the
contents of the notice of administrative charge, there were irregularities in the procedural
due process accorded to her.
Moreover, PAL denied Montinola substantial due process. The employer has the burden
of proof in showing that disciplinary action was made for lawful cause. The employer
must consider and show facts adequate to support the conclusion that an employee
deserves to be disciplined for his or her acts or omissions. The lists are not sufficient to
show the participation of any of the flight crew members least of all, Montinola. The
evidence presented did not show that the customs official confiscated any of the items
from her. Thus, the evidence by itself do not show that Montinola pilfered airline items.
PAL’s action in implicating Montinola and penalizing her for no clear reason shows bad
faith. She was denied of her request to clarify the charges against her. So, the act of
PAL is contrary to morals, good customs and public policy because Montinola was
deprived of her wages that she should have earned during the period of the suspension.
She is also entitled to moral damages. It is socially deleterious for PAL to suspend
Montinola without just cause in the manner suffered by her. Hence, exemplary damages
are necessary to deter future employers in committing the same acts.

8. Amecos Innovations, Inc. vs. Lopez

G.R. No. 178055, July 2, 2014

JURISDICTION OVER CASES INVOLVING REIMBURSEMENT OF SSS CONTRIBUTION

FACTS:
 -
Amecos received a Subpoena from the Office of the City Prosecutor of Quezon
City in connection with a complaint filed by the Social Security System (SSS) for
alleged delinquency in the remittance of SSS contributions and penalty liabilities.
-
By way of explanation, Amecos attributed its failure to remit the SSS
contributions to respondent Eliza R. Lopez.
-
Amecos claimed that it hired respondent on January 15, 2001 as Marketing
Assistant to promote its products; that upon hiring, respondent refused to provide
Amecos with her SSS Number and to be deducted her contributions; that on the
basis of the foregoing, Amecos no longer enrolled respondent with the SSS and
did not deduct her corresponding contributions up to the time of her termination
in February 2002.
-
Amecos eventually settled its obligations with the SSS; consequently, SSS filed a
Motion to Withdraw Complaint which was approved by the Office of the City
Prosecutor.
-
Thereafter, petitioners filed a Complaint for sum of money and damages against
respondent, claiming that because of respondent’s misrepresentation, they
suffered actual damages in the amount of ₱27,791.65 allegedly incurred by
Amecos by way of settlement and payment of its obligations with the SSS.
-
Mateo (Amecos’ president) also allegedly suffered extreme embarrassment and
besmirched reputation as a result of the filing of the complaint by the SSS. Hence,
they prayed for ₱50,000.00 as moral damages, ₱50,000.00 as exemplary damages,
₱50,000.00 as attorney’s fees, and costs of the suit.
-
Respondent filed her Answer with Motion to Dismiss claiming that she was
formerly an employee of Amecos until her illegal dismissal in February 2002; that
Amecos deliberately failed to deduct and remit her SSS contributions; and that
petitioners filed the instant Complaint in retaliation to her filing of an illegal
dismissal case. Respondent also averred that the regular courts do not have
jurisdiction over the instant case as it arose out of their employer-employee
relationship.
-
The MTC dismissed the complaint for lack of jurisdiction. This was affirmed by
the RTC and CA.

Issue: Whether or not the RTC has jurisdiction over the claims for reimbursement
arising from ER-EE relationship

Ruling:
NO. The Court holds that as between the parties, Article 217(a)(4) of the Labor Code is
applicable. Said provision bestows upon the Labor Arbiter original and exclusive
jurisdiction over claims for damages arising from employer-employee relations. The
observation that the matter of SSS contributions necessarily flowed from the employer-
employee relationship between the parties – shared by the lower courts and the CA – is
correct; thus, petitioners’ claims should have been referred to the labor tribunals. In this
connection, it is noteworthy to state that "the Labor Arbiter has jurisdiction to award not
only the reliefs provided by labor laws, but also damages governed by the Civil Code."

9. Tolosa vs. NLRC

G.R. No. 149578, April 10, 2003

Facts:
 -
Evelyn Tolosa (hereafter EVELYN), was the widow of Captain Virgilio Tolosa who was
hired by Qwana-Kaiun, through its manning agent, Asia Bulk Transport Phils. Inc., to be
the master of the Vessel named M/V Lady Dona. Upon the vessel's departure from
Yokohama, CAPT. TOLOSA was drenched with rainwater. The following day, he had a
slight fever and in the succeeding twelve (12) days, his health rapidly deteriorated
resulting in his death on November 18, 1992.
-
Because of the death of CAPT. TOLOSA, his wife, EVELYN, as petitioner, filed a
Complaint/Position Paper before the POEA against Qwana-Kaiun, thru its resident-agent,
Mr. Fumio Nakagawa, ASIA BULK, Pedro Garate and Mario Asis, as respondents.
-
After initial hearings and submissions of pleadings, the case was however transferred to
the Department of Labor and Employment, National Labor Relations Commission (NLRC),
when the amendatory legislation expanding its jurisdiction, and removing overseas
employment related claims from the ambit of POEA jurisdiction. The case was then
raffled to Labor Arbiter, Vladimir Sampang.
-
On appeal, the NLRC dismissed the case for lack of jurisdiction. This was affirmed by the
CA, ruling that the labor commission had no jurisdiction over the subject
matter of the action filed by petitioner. Her cause did not arise from an
employer-employee relation, but from a quasi delict or tort. Further, there is
no reasonable causal connection between her suit for damages and her claim
under Article 217 (a)(4) of the Labor Code, which allows an award of damages
incident to an employer-employee relation.

Issue:
Whether the Labor Arbiter has jurisdiction over the case.

Ruling:
No. The Court ruled that the case does not involve the adjudication of a labor dispute, but the
recovery of damages based on a quasi delict. The jurisdiction of labor tribunals is limited to
disputes arising from employer-employee relations, as we ruled in Georg Grotjahn GMBH & Co. v.
Isnani.
The labor arbiter himself classified petitioner's case as "a complaint for damages, blacklisting and
watchlisting (pending inquiry) for gross negligence resulting in the death of complainant's
husband, Capt. Virgilio Tolosa."
While it is true that labor arbiters and the NLRC have jurisdiction to award not only reliefs
provided by labor laws, but also damages governed by the Civil Code, these reliefs must still be
based on an action that has a reasonable causal connection with the Labor Code, other labor
statutes, or collective bargaining agreements.
The pivotal question is whether the Labor Code has any relevance to the relief sought by
petitioner. From her paper, it is evident that the primary reliefs she seeks are as follows: (a) loss
of earning capacity denominated therein as "actual damages" or "lost income" and (b)
blacklisting. The loss she claims does not refer to the actual earnings of the deceased, but to his
earning capacity based on a life expectancy of 65 years. This amount is recoverable if the action
is based on a quasi delict as provided for in Article 2206 of the Civil Code, but not in the Labor
Code.
 
NOTE: REASONABLE CAUSAL CONNECTION RULE- if there is a reasonable causal
connection between the claim and employer-employee relationship, labor courts have
jurisdiction; if none, regular courts.

10. Indophil Textile Mills, Inc. vs. Engr. Adviento,

G.R. No. 171212, August 4, 2014

Facts:
-
Petitioner which is engaged in the business of manufacturing thread for weaving, hired
respondent Engr. Salvador Adviento as Civil Engineer to maintain its facilities in
Lambakin, Marilao, Bulacan.
-
On August 7, 2002, respondent consulted a physician due to recurring weakness and
dizziness. Few days later, he was diagnosed with Chronic Poly Sinusitis, and thereafter,
with moderate, severe and persistent Allergic Rhinitis. Accordingly, respondent was
advised by his doctor to totally avoid house dust mite and textile dust as it will transmute
into health problems.
 -
Respondent filed a Complaint with the Regional Trial Court (RTC) of Aparri, Cagayan,
alleging that he contracted such occupational disease by reason of the gross negligence
of petitioner to provide him with a safe, healthy and workable environment.
-
Respondent averred that, being the only breadwinner in the family, he made several
attempts to apply for a new job, but to his dismay and frustration, employers who knew
of his present health condition discriminated against him and turned down his
application. By reason thereof, respondent suffered intense moral suffering, mental
anguish, serious anxiety and wounded feelings, praying for the recovery of moral,
exemplary and compensatory damages. 
-
Petitioner filed a Motion to Dismiss on the ground that the RTC has no jurisdiction over
the subject matter of the complaint because the same falls under the original and
exclusive jurisdiction of the Labor Arbiter (LA) under Article 217(a)(4) of the Labor Code.
-
RTC issued a Resolution denying the aforesaid Motion and sustaining its jurisdiction over
the instant case. It held that petitioner’s alleged failure to provide its employees with a
safe, healthy and workable environment is an act of negligence, a case of quasi-delict. As
such, it is not within the jurisdiction of the LA under Article 217 of the Labor Code.
-
Petitioner then filed a Petition for Certiorari with the CA on the ground that the RTC
committed grave abuse of discretion amounting to lack or excess of jurisdiction in
upholding that it has jurisdiction over the subject matter of the complaint despite the
broad and clear terms of Article 217 of the Labor Code but the same was dismissed for
lack of merit. 

Issue:
Whether the RTC has jurisdiction over the subject matter of respondent’s complaint
praying for moral damages, exemplary damages, compensatory damages, anchored
on petitioner’s alleged gross negligence in failing to provide a safe and healthy
working environment for respondent

Ruling:
Yes. While the Court has upheld the present trend to refer worker-employer controversies to
labor courts in light of Article 217 of the Labor Code, the Court has also recognized that not all
claims involving employees can be resolved solely by our labor courts, specifically when the law
provides otherwise. For this reason, the "reasonable causal connection rule” is formulated
wherein if there is a reasonable causal connection between the claim asserted and the
employer-employee relations, then the case is within the jurisdiction of the labor courts; and in
the absence thereof, it is the regular courts that have jurisdiction. 
Furthermore, to sustain a claim liability under quasi-delict, the following requisites must concur:
(a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some other
person for whose acts he must respond; and (c) the connection of cause and effect between the
fault or negligence of the defendant and the damages incurred by the plaintiff. 
In the case at bar, respondent alleges that due to the continued and prolonged
exposure to textile dust seriously inimical to his health, he suffered work-contracted
disease which is now irreversible and incurable, and deprived him of job
opportunities. Clearly, injury and damages were allegedly suffered by respondent, an
element of quasi-delict. Secondly, the previous contract of employment between
petitioner and respondent cannot be used to counter the element of "no pre-existing
contractual relation" since petitioner’s alleged gross negligence in maintaining a
hazardous work environment cannot be considered a mere breach of such contract of
employment, but falls squarely within the elements of quasi-delict under Article 2176
of the Civil Code since the negligence is direct, substantive and independent.
It also bears stressing that respondent is not praying for any relief under the Labor
Code of the Philippines. He neither claims for reinstatement nor backwages or
separation pay resulting from an illegal termination. The cause of action herein
pertains to the consequence of petitioner’s omission which led to a work-related
disease suffered by respondent, causing harm or damage to his person. Such cause of
action is within the realm of Civil Law, and jurisdiction over the controversy belongs
to the regular courts.
 
 
Note: Reason for reasonable causal connection- Such distinction is apt since it cannot be
presumed that money claims of workers which do not arise out of or in connection with their
employer-employee relationship, and which would therefore fall within the general jurisdiction of
the regular courts of justice, were intended by the legislative authority to be taken away from the
jurisdiction of the courts and lodged with Labor Arbiters on an exclusive basis.
 11.Tabango Shell Refinery Employees Association vs.
Pilipinas Shell Petroleum Corp.
G.R. No. 170007, April 7, 2014

FACTS:
-
In anticipation of the expiration of the collective bargaining agreement between
petitioner and respondent, the parties started negotiations for the new CBA. The union
proposed a 20% annual across-the-board basic salary increase for the next three years
that would be covered by the new CBA. The company made a counter-proposal to grant
all covered employees a lump sum amount of ₱80,000.00 yearly for the three-year period
of the new CBA. The union requested the company to present its counter-proposal in full
detail. The company explained that the lump sum amount was based on its affordability
for the corporation. Several meetings were held to justify the company’s counter-
proposal but the union remained unconvinced, Alleging failure on the part of the
company to justify its offer, the union manifested that the company was bargaining in
bad faith.
-
On the parties’ 41st meeting, the company proposed the declaration of a deadlock and
recommended the help of a third party. The union filed a Notice of Strike in the National
Conciliation and Mediation Board (NCMB), alleging bad faith bargaining on the part of the
company. The NCMB immediately summoned the parties for the mandatory conciliation-
mediation proceedings but the parties failed to reach an amicable settlement.
-
During the cooling off period, the union conducted the necessary strike vote. The
members of the union, unanimously voted for the holding of a strike. Upon being aware
of this development, the company filed a Petition for Assumption of Jurisdiction with the
Secretary of Labor and Employment. 
-
Convinced that such a strike would have adverse consequences on the national economy,
the Secretary of Labor and Employment ruled that the labor dispute between the parties
would cause or likely to cause a strike in an industry indispensable to the national
interest. Thus, the Secretary of Labor and Employment assumed jurisdiction over the
dispute of the parties.
-
The union thereafter filed a petition questioning the jurisdiction of the Secretary of Labor
over the dispute. The union alleged that the Secretary of Labor and Employment acted
with grave abuse of discretion in grossly misappreciating the facts and issue of the case
since the real issue is the unfair labor practice of the company in the form of bad faith
bargaining, and not the CBA deadlock.
-
The company argues that the Secretary of Labor has jurisdiction over the labor dispute
between the parties. Respondent contended that even if the union’s first Notice of Strike
was based on unfair labor practice and not deadlock in bargaining, the Secretary of Labor
and Employment’s assumption of jurisdiction over the labor dispute between the parties
extended to all questions and controversies arising from the labor dispute, that is,
including the economic issues.

ISSUE: Whether or not the assumption of jurisdiction by DOLE Secretary was proper

HELD: Yes. 

The Secretary of the DOLE has been explicitly granted by Article 263(g) of the Labor Code the
authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, and decide the same
accordingly. And, as a matter of necessity, it includes questions incidental to the labor dispute;
that is, issues that are necessarily involved in the dispute itself, and not just to that ascribed in
the Notice of Strike or otherwise submitted to him for resolution.

In this case, the labor dispute between the union and the company concerned the
unresolved matters between the parties in relation to their negotiations for a new
CBA. The power of the Secretary of Labor and Employment to assume jurisdiction
over this dispute includes and extends to all questions and controversies arising from
the said dispute, such as, but not limited to the union’s allegation of bad faith
bargaining. It also includes and extends to the various unresolved provisions of the
new CBA such as compensation, particularly the matter of annual wage increase or
yearly lump sum payment in lieu of such wage increase, whether or not there was
deadlock in the negotiations. 

As the term “assume jurisdiction” connotes, the intent of the law is to give the DOLE
Secretary full authority to resolve all matters within the dispute that gave rise to the
strike or lockouts and controversies and cases over which the Labor Arbiter has
jurisdiction.

12. Smart Communications, Inc. vs. Regina M. Astorga

G.R. No. 148132
Regina Astorga vs. Smart Communications, Inc. et.
al.
G.R. No. 151079, January 28, 2008

FACTS: Astorga was terminated from employment, for which reason she filed a complaint for
illegal dismissal. Smart demanded that she pays the current value of the Honda Civic Sedan
which was given to her under the company’s car plan program or surrender the same for proper
disposition. Astorga, however, failed and refused to do either, thus prompting Smart to file a suit
for replevin with the RTC.

Astorga moved to dismiss the complaint on the ground of lack of jurisdiction. Astorga posited
that the regular courts have no jurisdiction over the complaint because the subject thereof
pertains to a benefit arising from an employment contract; hence, jurisdiction over the same is
vested in the labor tribunal and not in regular courts

ISSUE: Whether or not the Labor Arbiter has jurisdiction over replevin case

HELD: No. The RTC has rightfully assumed jurisdiction over the suit and acted well within its
discretion in denying Astorga’s motion to dismiss. 

Replevin is an action whereby the owner or person entitled to repossession of goods or chattels
may recover those goods or chattels from one who has wrongfully distrained or taken, or who
wrongfully detains such goods or chattels. It is designed to permit one having right to possession
to recover property in specie from one who has wrongfully taken or detained the property

This case is to enforce a right of possession over a company car assigned to the defendant under
a car plan privilege arrangement. The car is registered in the name of the plaintiff. Recovery
thereof via replevin suit is allowed by Rule 60 of the 1997 Rules of Civil Procedure, which is
undoubtedly within the jurisdiction of the Regional Trial Court.

Smart’s demand for the payment or, in the alternative, the surrender of the car is not a labor but
a civil dispute. It involves the relationship of debtor and creditor rather that employer-employee
relations. As such, the dispute falls within the jurisdiction of the regular courts.

The labor dispute is not intertwined with the issue in the replevin case. The respective issues
raised in each forum can be resolved independently on the other.

13. Emer Milan, et. al. vs. NLRC

G.R. No. 202961, February 4, 2005
FACTS:
-
Petitioners are Solid Mills, Inc.’s (SMI) employees who are represented by NAFLU, their
collective bargaining agent. Petitioners and their families were allowed to occupy the SMI
village, a property owned by Solid Mills.
-
They were informed that Solid Mills would cease its operation due to serious business
losses. NAFLU recognized the closure in the Memorandum of Agreement which provided
Solid Mills grant of separation pay less accountabilities.
 -
Later, Solid Mills sent individual notice to vacate SMI village. They were required to sign
a memorandum of agreement with release and quitclaim before their pay would be
released.
-
The petitioners refused to sign the document and demanded to be paid their benefits
and separation pay. Hence, they filed complaints before the Labor Arbiter for alleged
non-payment.
-
Petitioners argue that respondent Solid Mills and NAFLU’s memorandum of agreement
has no provision stating that benefits shall be paid only upon return of the possession of
respondent Solid Mills’ property.
-
The Labor Arbiter ruled in favor of petitioners. 21 According to the Labor Arbiter, Solid Mills
illegally withheld petitioners’ benefits and separation pay.
-
Solid Mills appealed to the National Labor Relations Commission. The NLRC ruled that
because of petitioners’ failure to vacate Solid Mills’ property, Solid Mills was justified in
withholding their benefits and separation pay.  Solid Mills granted the petitioners the
privilege to occupy its property on account of petitioners’ employment.  It had the
prerogative to terminate such privilege. The termination of Solid Mills and petitioners’
employer-employee relationship made it incumbent upon petitioners to turn over the
property to Solid Mills. 
-
CA affirmed the decision of NLRC prompting petitioners to file this present case.
Petitioners pointed out that the NLRC and the CA have no jurisdiction to declare that
petitioners’ act of withholding possession of respondent Solid Mills’ property is illegal. The
regular courts have jurisdiction over this issue. It is independent from the issue of
payment of petitioners’ monetary benefits

ISSUE: Whether or not NLRC has jurisdiction to the issue on the rights of the parties over the
property?

HELD: Yes.
The National Labor Relations Commission has jurisdiction to determine, preliminarily,
the parties’ rights over a property, when it is necessary to determine an issue related
to rights or claims arising from an employer-employee relationship.
Article 217 provides that the Labor Arbiter, in his or her original jurisdiction, and the
National Labor Relations Commission, in its appellate jurisdiction, may determine
issues involving claims arising from employer-employee relations.
Petitioners’ claim that they have the right to the immediate release of their benefits
as employees separated from respondent Solid Mills is a question arising from the
employer-employee relationship between the parties. Claims arising from an
employer-employee relationship are not limited to claims by an employee. Employers
may also have claims against the employee, which arise from the same relationship. 
The designating clause "arising from the employer-employee relations" in 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 this case, respondent Solid Mills claims that its properties are in petitioners’ possession by
virtue of their status as its employees. Respondent Solid Mills allowed petitioners to use its
property as an act of liberality. Put in other words, it would not have allowed petitioners to use
its property had they not been its employees. The return of its properties in petitioners’
possession by virtue of their status as employees is an issue that must be resolved to
determine whether benefits can be released immediately. The issue raised by the
employer is, therefore, connected to petitioners’ claim for benefits and is sufficiently
intertwined with the parties’ employer-employee relationship. Thus, it is properly
within the labor tribunals’ jurisdiction.

SUFFICIENTLY CONNECTED AND / OR INTERTWINED WITH THE CLAIMS OF EE/ER

ARISING FROM THE RELATIONSHIP

14. The Manila Hotel Corp vs. NLRC, G.R. No. 120077,
October 13, 2000

FACTS:
-
Marcelo Santos was an overseas worker in Oman.
 -
In June 1988, he was recruited by Palace Hotel in Beijing, China. Due to higher pay and
benefits, Santos agreed to the hotel’s job offer and so he started working there in
November 1988.
-
The employment contract between him and Palace Hotel was, however, without the
intervention of the Philippine Overseas Employment Administration (POEA).
-
In August 1989, Palace Hotel notified Santos that he will be laid off due to business
reverses. In September 1989, he was officially terminated.
-
In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel
Corporation (MHC) and Manila Hotel International, Ltd. (MHIL). The Palace Hotel was
impleaded but no summons were served upon it. 
-
MHC is a government owned and controlled corporation. It owns 50% of MHIL, a foreign
corporation (Hong Kong). MHIL manages the affair of the Palace Hotel.
-
The labor arbiter who handled the case ruled in favor of Santos. The National Labor
Relations Commission (NLRC) affirmed the labor arbiter. The hotel argued that POEA and
not NLRC has jurisdiction over the case, hence, this petition.

ISSUE: Whether or not NLRC has jurisdiction over the case

HELD: No. the NLRC was seriously an inconvenient forum. The main aspects of the case
transpired in two foreign jurisdictions and the case involves purely foreign elements. The only link
that the Philippines has with the case is that Santos is a Filipino citizen. The Palace Hotel and
MHICL are foreign corporations. Moreover, not all cases involving our citizens can be tried in the
Philippines.

Under the rule of forum non-conveniens, a Philippine court or agency may assume jurisdiction
over the case if:
1. Philippine Court is one to which the parties may conveniently resort to;

2. Philippine Court is in position to make an intelligent decision as to the law and facts; and

3. Philippine court has or is likely to have power to enforce its decisions.

In the case, these conditions are unavailing, therefore, NLRC is not the proper forum.

15. Halaguena, et. al. vs. Philippine Airlines, Inc.

G.R. No. 172013, October 2, 2009

FACTS:
-
Petitioners were employed as flight attendants of PAL and are members of Flight
Attendants and Stewards Association of the Philippines (FASAP), the union exclusive
bargaining organization of the flight attendant, flight stewards, and pursers. PAL and
FASAP entered into CBA incorporating the terms and conditions of their agreement which
provides for compulsory retirement age for female which is 55 and for male is 60.
-
Petitioners and other several female cabin crews manifested that the CBA provision is
discriminatory, hence, they filed for a special civil action for declaratory relief with
issuance of TRO with the RTC. The RTC issued a TRO for the invalidity of the assailed
provision of the CBA. The RTC eventually granted such petition.
-
Aggrieved, PAL filed a Petition for Certiorari and Prohibition with Prayer for a Temporary
Restraining Order and Writ of Preliminary Injunction with the Court of Appeals praying
that the order of the RTC, which denied its objection to its jurisdiction, be annulled and
set aside for having been issued without and/or with grave abuse of discretion
amounting to lack of jurisdiction.
-
The CA granted PAL’s petition on the ground that the RTC has no jurisdiction over the
labor dispute, hence the case at bar.

ISSUE: Whether or not the RTC has jurisdiction over the constitutionality of the CBA

HELD: Yes. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable
by the RTC. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals.
 
Not every controversy or money claim by an employee against the employer or vice-
versa is within the exclusive jurisdiction of the labor arbiter. Actions between
employees and employer where the employer-employee relationship is merely
incidental and the cause of action precedes from a different source of obligation is
within the exclusive jurisdiction of the regular court. 
 
Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals. 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 a case, 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
quasi-judicial powers. The jurisdiction of labor arbiters and the NLRC under Article 217 of the
Labor Code is limited to dispute 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.

16. Santos vs. Servier Philippines, Inc.

G.R. No. 166377, November 28, 2008

Facts: Company taxed the benefits claimed by the heirs of the employee.

-
On March 29, 1998, petitioner, 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.
5

-
While having dinner, petitioner complained of stomach pain, then
vomited. Eventually, she was brought to the hospital known as Centre
Chirurgical de L Quest where she fell into coma for 21 days; and later
stayed at the Intensive Care Unit (ICU) for 52 days.
-
The hospital found that the probable cause of her sudden attack was
"alimentary allergy," as she had recently ingested a meal of mussels
which resulted in a concomitant uticarial eruption.
-
During the time that petitioner was confined at the hospital, her husband
and son stayed with her in Paris. Petitioner's hospitalization expenses, as
well as those of her husband and son, were paid by respondent.
-
In June 1998, petitioner's attending physicians gave a prognosis of the
former's condition; and, with the consent of her family, allowed her to go
back to the Philippines for the continuation of her medical treatment. She
was then confined at the St. Luke's Medical Center for rehabilitation. 8

During the period of petitioner's rehabilitation, respondent continued to

pay the former's salaries; and to assist her in paying her hospital bills.
-
In a letter dated May 14, 1999, respondent informed the petitioner that
the former had requested the latter's physician to conduct a thorough
physical and psychological evaluation of her condition, to determine her
fitness to resume her work at the company. Petitioner's physician
concluded that the former had not fully recovered mentally and physically.
Hence, respondent was constrained to terminate petitioner's services
effective August 31, 1999. 9

-
Petitioner, represented by her husband, instituted the instant case for unpaid
salaries; unpaid separation pay; unpaid balance of retirement package plus
interest; insurance pension for permanent disability; educational assistance for her
 son; medical assistance; reimbursement of medical and rehabilitation expenses;
moral, exemplary, and actual damages, plus attorney’s fees.
-
As a consequence of petitioner's termination from employment, respondent
offered a retirement package. Of the promised retirement benefits amounting to
P1,063,841.76, only P701,454.89 was released to petitioner's husband, the
balance thereof was withheld allegedly for taxation purposes. Respondent also
failed to give the other benefits.
-
Clearly, the benefits received by petitioner from the respondent represent
her retirement benefits under the Plan. The question that now confronts
us is whether these benefits are taxable. If so, respondent correctly made
the deduction for tax purposes. Otherwise, the deduction was illegal and
respondent is still liable for the completion of petitioner’s retirement
benefits.

-
Respondent argues that the legality of the deduction from petitioner’s total
benefits cannot be taken cognizance of by this Court since the issue was not raised
during the early stage of the proceedings.
-
The Labor Arbiter and NLRC ruled that it has no jurisdiction over the issue on tax
Deductions. Unsatisfied, petitioner elevated the matter to the Court of Appeals
which affirmed the NLRC decision.

ISSUE: WON the LA has jurisdiction to rule on the legality on the tax deductions made by
the respondent employer from the petitioner’s total retirement benefits for taxation
Purposes. YES

Ruling: Contrary to the Labor Arbiter and NLRC’s conclusions, petitioner’s claim for illegal
deduction falls within the tribunal’s 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 petitioner’s benefits have been fully given her. It is, therefore, a
money claim arising from the employer-employee relationship, which clearly falls within
the jurisdiction41 of the Labor Arbiter and the NLRC.

At the outset, the Court notes that initially, petitioner raised the issue of whether she was entitled to separation pay,
retirement benefits, and damages. In support of her claim for separation pay, she cited Article 284 of the Labor Code,
as amended. However, in coming to this Court via a petition for review on certiorari, she abandoned her original
position and alleged that she was, in fact, not dismissed from employment based on the above provision. She argued
that her situation could not be characterized as a disease; rather, she became disabled. In short, in her petition before
us, she now changes her theory by saying that she is not entitled to separation pay but to retirement pay pursuant to
Section 4,26 Article V of the Retirement Plan, on disability retirement. She, thus, prayed for the full payment of her
retirement benefits by giving back to her the amount deducted for taxation purposes.

17. Honda Cars Phils., Inc. vs. Honda Cars Technical

Specialist and Supervisors Union
G.R. No. 204142, November 19, 2014

Facts:
-
On 2006, petitioner Honda Cars Philippines, Inc., (company) and respondent
Honda Cars Technical Specialists and Supervisory Union, entered into a
collective bargaining agreement.
-
Prior to April 1, 2005, the union members were receiving a transportation
allowance of 3,300.00 a month.
-
On September 3, 2005, the company and the union entered into a Memorandum
of Agreement5 (MOA) converting the transportation allowance into a monthly
gasoline allowance. It was provided, that in the event the amount of gasoline is
not fully consumed, the gasoline not used may be converted into cash, subject to
whatever tax may be applicable. Since the cash conversion is paid in the monthly
payroll as an excess gas allowance, the company considers the amount as part of
the managers’ and AVPs’ compensation that is subject to income tax on
compensation.
-
The union, on the other hand, argued that the gasoline allowance for its members
is a "negotiated item" under their CBA on fringe benefits. The disagreement
between the company and the union on the matter resulted in a grievance which
they referred to the CBA grievance procedure for resolution.
-
As it remained unsettled there, they submitted the issue to a panel of voluntary
arbitrators as required by the CBA. The Panel of Voluntary Arbitrators declared
that the cash conversion of the unused gasoline allowance enjoyed by the
members of the union is a fringe benefit subject to the fringe benefit tax, not to
income tax.

Issue: WON the Voluntary Arbitrator has jurisdiction to settle tax matters

Ruling: No. The Voluntary Arbitrator has no competence to rule on the taxability
of the gas allowance and on the propriety of the withholding of tax.
These issues are clearly tax matters, and do not involve labor disputes. To be
exact, they involve tax issues within a labor relations setting as they pertain
to questions of law on the application of Section 33 (A) of the NIRC. They do
not require the application of the Labor Code or the interpretation of the
MOA and/or company personnel policies. Furthermore, the company and
the union cannot agree or compromise on the taxability of the gas allowance.
Taxation is the State’s inherent power; its imposition cannot be subject to the
will of the parties.

Under paragraph 1, Section 4 of the NIRC, the CIR shall have the exclusive and original
jurisdiction to interpret the provisions of the NIRC and other tax laws, subject to review by the
Secretary of Finance.
Consequently, if the company and/or the union desire/s to seek clarification of these issues, it/they
should have requested for a tax ruling from the Bureau of Internal Revenue (BIR).
Any revocation, modification or reversal of the CIR’s ruling shall not be given retroactive
application if the revocation, modification or reversal will be prejudicial to the taxpayers, except in
the following cases:
(a) Where the taxpayer deliberately misstates or omits material facts from his return or any
document required of him by the BIR;
(b) Where the facts subsequently gathered by the BIR are materially different from the facts on
which the ruling is based; or
(c) Where the taxpayer acted in bad faith.

Notes:
Labor dispute means "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 the
disputants stand in the proximate relation of employer and employee."
The issues raised before the Panel of Voluntary Arbitrators are:
(1) whether the cash conversion of the gasoline allowance shall be subject to fringe benefit tax or
the graduated income tax rate on compensation; and
(2) whether the company wrongfully withheld income tax on the converted gas allowance.
 18. Jordan vs. Grandeur Security and Services, Inc.
G.R. No. 206716, June 18, 2014

FACTS:
-
Jordan, together with his co-employees, Valentino Galache and Ireneo Esguerra,
(collectively, the complainants) filed individual complaints for money claims against
Nicolas Pablo and respondent Grandeur Security and Services Corp. (Grandeur
Security).  
3

-
They alleged that Grandeur Security did not pay them minimum wages, holiday,
premium, service incentive leave, and thirteenth month pays as well as the cost of
living allowance. They likewise claimed that Grandeur Security illegally deducted
from their wages the amount of five hundred pesos (₱500.00) per annum as
premiums of their insurance policies. Galache additionally asked for the payment of
overtime pay for work he allegedly rendered beyond eight hours.   4

-
On May 28, 2007, Jordan amended his complaint and included illegal dismissal as
his additional cause of action. 
-
LA ruled in favor of respondent and ordered Grandeur Security to "reinstate" Jordan
in employment. The LA further awarded the complainants monetary claims for
Grandeur Security’s failure to adduce evidence of payment except Galache’s claim
for overtime pay due to lack of proof that he rendered work beyond eight hour.
-
Grandeur Security partially appealed the May 27, 2008 decision before the NLRC
with respect to the grant of monetary awards.  However, it did not contest the
12

"reinstatement order" as it allegedly mailed Jordan a return to work order.

-
The NLRC denied Grandeur Security’s partial appeal and the subsequent motion for
reconsideration.
-
On December 15, 2010, the LA pronounced the proceedings in NLRC-NCR Case
No. 00-05-05003-07 closed and terminated in view of: (1) the complainant’s
individual quitclaims; and (2) Jordan’s waiver of his right to be reinstated. The LA
found that Jordan did not report for work despite his receipt of Grandeur Security’s
letter
-
Jordan appealed the December 15, 2010 order before the NLRC and insisted that he
did not receive the letter.  He asserted that the signature in the registry return card
21

neither belonged to him nor to his wife,

-
NLRC set aside the December 15, 2010 order. The NLRC gave weight to Jordan and
his wife’s specimen signatures in finding that Jordan did not receive the subject
letter. It further observed that the signature appearing in the registry return card was
"more similar" to Esguerra’s signature. The NLRC thus ruled that Jordan was entitled
to backwages and separation pay for Grandeur Security’s failure to comply with the
reinstatement order
-
CA nullified the NLRC ruling. The CA held that the NLRC gravely abused its
discretion when it ordered Grandeur Security to pay Jordan backwages, separation
pay, and attorney’s fees despite the immutability of the May 27, 2008 decision. Citing
Section 9, Rule 11 of the 2011 NLRC Rules of Procedure, the CA declared that the
consequence of the employer’s refusal to reinstate an employee was to cite the
employer in contempt, and not to order the payment of backwages and
separation pay.
-
In its Comment,  Grandeur Security argues that the NLRC had no jurisdiction to alter
32

the May 27, 2008 decision which has already attained finality.

ISSUE: WON The NLRC has original jurisdiction over termination dispute. NO

HELD: This procedural recourse is a serious error that the NLRC and the CA should
have immediately spotted. The NLRC and the CA should have immediately dismissed
the "memorandum of appeal" for lack of jurisdiction. Under Article 217 (a) (2), and (b)
of the Labor Code, the LA has original and exclusive jurisdiction over termination
disputes; the NLRC only has exclusive appellate jurisdiction over these cases.
Furthermore, Jordan’s remedy against Grandeur’s Security alleged disobedience to
the return to work order is not to file a complaint for illegal dismissal, but to ask the
NLRC to hold Grandeur Security in indirect contempt.
We should understand the procedural recourse that Jordan had taken after the issuance of
the December 15,2010 order to fully comprehend the CA’s nullification of the NLRC rulings
dated February 21 and March 28, 2011. In the proceedings below, Jordan appealed the
December 15, 2010 order before the NLRC to contest his alleged receipt of the subject
letter. Significantly, Jordan prayed for backwages and separation pay, in lieu of
reinstatement, in his "memorandum of appeal" dated January 10, 2011.

It is a basic rule that the averments in the body of the pleading and the character of
the relief sought determine the nature of the action and which court has jurisdiction
over the case. It is not the title of the pleading but its allegations that must control.  A40

plain reading of the "memorandum of appeal" shows that this pleading was in fact
another complaint for illegal dismissal. Jordan alleged in his "memorandum of
appeal" that his claims for backwages, separation pay, and attorney’s fees arose after
Grandeur Security refused to heed the LA’s return to work order in the May 27, 2008
decision; he vehemently insisted that he did not receive Grandeur Security’s letter
ordering him to return to work. Also, Jordan specifically asked for backwages
beginning June 2008or after the promulgation of the May 27, 2008 decision.

19. Arlo Aluminum, Inc. vs. Pinon, Jr. (quit claims)

G.R. No. 215874, July 5, 2017

FACTS:
-
Petitioner Arlo Aluminum, Inc. (Arlo Aluminum) is a duly registered corporation engaged
in the business of fabrication and supply of aluminum moldings.
-
In 2009, it was contracted by Eton Properties Philippines, Inc. (Eton Properties) to supply
and install aluminum and glass glazing works for its Eton Residences Greenbelt
condominium project at Legaspi St., Legaspi Village, Makati City (Eton Residence
Project).
-
Pursuant thereto, Arlo Aluminum engaged the services of E.M. Piñon Glazing (EMP
Glazing), through subcontracting, and among the latter's employees was Vic Edward
Piñon (Vic Edward), son of respondent Vicente Piñon, Jr. (Vicente).
-
On January 27, 2011, eleven (11) employees of EMP Glazing, including Vic Edward, were
aboard a gondola, which was used to install glass and aluminum along the perimeter of
the building, when it crashed from the thirty-second (32 nd) floor of the Eton Residence
Project. Ten (10) of the employees, including Vic Edward, died in the incident.
-
The families of the victims were extended financial assistance in the amount of
P150,000.00 by Eton Properties and Arlo Aluminum.
-
The funeral and burial expenses and the SSS contributions pertaining to Vic Edward
were also paid. In return, the families signed a Deed of Release, Waiver and Quitclaim.
-
On May 3, 2011, Vicente filed a complaint in behalf of his deceased son, Vic Edward,
before the LA for underpayment of wages, overtime pay, 13 th month pay, non-payment
of holiday pay, holiday premium, rest day premium, service incentive leave pay,
separation pay, night shift differential, and claims for damages and death benefits. He
asserted that starting 2009, Vic Edward's salary was P280.00, still below the minimum
wage rate, and that he was not paid his service incentive leave pay and 13 th month pay.
-
Vicente added that during the wake of his son, the representatives of Eton Properties
and Arlo Aluminum extended financial assistance in the amount of P150,000.00.
Believing that this was only by way of financial assistance and nothing more, he
accepted the same and signed the deed of release, waiver and quitclaim. Vicente
eventually learned that the amount paid as salaries to his deceased son was not in
accordance with law. Hence, he filed the subject suit.
-
For its part, Arlo Aluminum countered that on January 27, 2011, the date of the
accident, an on-site labor standards and occupational safety and health standards
inspection was conducted by the Department of Labor and Employment-National
 Capital Region (DOLE-NCR). The inspection case was docketed as Case No. NCR-TSSD-
1101-RI-004 SPL. Several hearings were conducted therein and were attended by Eton
Properties, C.E. Construction and Arlo Aluminum. It was found therein that Vic Edward
was not an employee of Eton Properties.

-
LA ruled in favor of Arlo Aluminum. It found that Edward had an employer-employee
relationship with EMP Glazing only and the latter was merely hired by Arlo Aluminum as
its subcontractor.

-
NLRC modified the LA ruling. It upheld the computation of the LA that Vicente must be
paid salary differential, service incentive leave pay and 13th month pay in the total
amount of ₱145,276.22.10 Further, the NLRC stated that although EMP Glazing was an
independent contractor, it did not completely absolve Arlo Aluminum and Eton
Properties from all liabilities.

-
CA affirmed the ruling of the NLRC. It held that the deed of release, waiver and quitclaim
was invalid because it was signed only a week after the death of Vic Edward. The CA
opined that Eton Properties and Arlo Aluminum took advantage of Vicente's
overwrought state when it offered the financial assistance. It was invalid also because it
covered all the claims that Vicente might have against Eton Properties and Ario
Aluminum.

-
Arlo Aluminum further contended that even if the quitclaim was declared invalid, the
₱150,000.00 should have been returned to Arlo Aluminum and Eton Properties, or it
should have offset their liabilities in the amount of ₱145,276.22; that it had not been
criminally or civilly declared liable for the incident; and that the CA should not have
discussed matters not raised as issues in its petition for certiorari, like ruling that EMP
Glazing was a labor-only contractor.

WON THE COURT OF APPEALS SHOULD NOT HA VE DECIDED FACTS WHICH WERE NOT
BROUGHT BEFORE IT FOR REVIEW BY THE PETITIONER AND ARE NOT MATERIAL AND
RELEVANT TO THE PRESENT CASE. YES

In the case at bench, even if the deed of release, waiver or quitclaim signed by Vicente is
declared invalid, it does not negate the fact that he alreay received ₱150,000.00 in
consideration thereof. The said amount must either be returned or deducted from the total
monetary award determined by the LA. To recap, the LA computed the monetary award in
favor of Vic Edward at ₱145,276.22. Evidently, the said amount is adequately covered by the
consideration in the quitclaim. Thus, Arlo Aluminum and Eton Properties have nothing more
to pay as far as the labor claims are concerned.

The Court cannot sanction the ruling of the CA that despite receiving the ₱150,000.00 from
the quitclaim, which clearly covers the salary and benefits that Vic Edward is entitled to, Arlo
Aluminum must still pay the amount of ₱145,276.22 as a monetary award. This will amount
to double compensation considering that said monetary award was already covered by the
quitclaim. Hence, the Court is of the view that Arlo Aluminum already satisfied its liabilities to
Vic Edward insofar as his unpaid wages and other labor benefits are concerned.

The jurisdiction of the LA is limited to hearing claims in connection with an existing

employer-employee relationship.  Article 224 of the Labor Code provides that the LA,
28

in his or her original jurisdiction, and the NLRC, in its appellate jurisdiction, may
determine issues involving claims arising from employer-employee relations. 29

Manifestly, the LA has no authority to decide issues not arising from the employment
contract of Vic Edward. If Vicente would want to pursue other legal actions against
Arlo Aluminum, Eton Properties, and EMP Glazing due to the tragedy that occurred,
he must do so in the courts which has jurisdiction over the subject matter.
 20. Trifon B. Tumaodos vs. San Miguel Yamamura
Packaging Corp.
G.R. No. 241865, February 19, 2020

FACTS:
-
Petitioner became an employee of respondent on October 6, 1988. As an
employee of respondent, petitioner became a member of SMC Employees
& Its Subsidiaries Multi-Purpose Cooperative (Cooperative).
-
Due to its plant reorganization, respondent implemented an Involuntary
Separation Program effective November 15, 2014. Petitioner was one of
8

the employees who availed himself of the program. His separation

package was computed at P3,080,244.66, but respondent withheld the
amount of P1,400,000.00 on behalf of the Cooperative, to which petitioner
allegedly had an outstanding indebtedness. 9

-
On October 13, 2014, respondent paid out petitioner's separation
benefits, less the amount withheld. Petitioner signed a Receipt and
Release in favor of respondent, but he made a notation that the amount
of P1,400,000.00 was still subject to verification. 10

-
On November 28, 2014, respondent received a letter from petitioner
wherein he claimed that he no longer had any outstanding obligation to
the Cooperative. Thus, petitioner demanded respondent to release to him
the withheld amount. On February 13, 2015, respondent also received a
letter from the Cooperative, disputing petitioner's assertions and also
claiming entitlement to the withheld amount.
-
Due to petitioner's and the Cooperative's conflicting claims, respondent,
on March 17, 2015, filed a Complaint for Interpleader with Consignation
before Branch 55, Regional Trial Court (RTC), Mandaue City. 11

-
Meanwhile, on April 22, 2015, petitioner filed a complaint before the NLRC
Regional Arbitration Branch No. VII for non-payment of separation pay
and damages. The case was docketed as NLRC RAB VII 04-1000-15. 12

Considering that settlements failed, the Labor Arbiter (LA) directed the
parties to simultaneously file their respective position papers. 13

ISSUE: WON the LA or RTC has jurisdiction over the case. RTC

RULING: 

RTC. Not all controversies or money claims by an employee against the employer or
vice versa fall within the exclusive jurisdiction of the LA.43 With regard to money claims
and damages, Article 224 (formerly Article 217) of the Labor Code, as amended,
bestows upon the LA original and exclusive jurisdiction over cases filed by workers
involving wages, among others, if accompanied by a claim for reinstatement;44 all
claims, except those for Employees Compensation, Social Security, Medicare and
maternity benefits, arising from employer-employee relations involving an amount
exceeding P5,000.00 regardless of whether accompanied with a claim for
reinstatement;45 and claims for actual, moral, exemplary and other forms of damages
arising from employer-employee relations.46

As can be gleaned above, the jurisdiction of the LA over money claims and damages is
confined to those cases which are either accompanied by a claim for reinstatement or
arising from employer-employee relations. Here, the Court finds that petitioner's claims
do not fall under any of these cases.

In ruling that the determination of the case is beyond the competence of the labor
tribunals, the CA found that although employment relations existed between respondent
and petitioner, and the subject of the complaint before the LA was petitioner's
money claims against respondent, such money claims did not involve and did not
arise out of such employment relationship. Hence, the CA held that the jurisdiction
over petitioner's claims belonged to the RTC, and not the labor tribunals.

21. Bishop Shinji Amari, et. al vs. Ricardo Villaflor, Jr.

G.R. No. 224521, February 17, 2020

Facts:
-
The controversy stemmed from the Letter dated November 24, 20116 where Ricardo
R. Villaflor, Jr. (respondent) was informed of his removal as a missionary of the Abiko
Baptist Church, cancellation of his American Baptist Association (ABA)
recommendation as a national missionary, and exclusion of his membership in the
Abiko Baptist Church in Japan.
-
Respondent believed that he was dismissed from his employment without the benefit
of due process and valid cause; thus, he filed a complaint before the NLRC. He
claimed that he was illegally dismissed from his work as missionary/minister because
he refused to sign a resignation letter and vacate the property where he had already
constructed a house and church building. Consequently, his salary was cut off.7
-
For their part, petitioners alleged that in 1999, respondent became a missionary
sponsored by Bishop Shinji Amari of the Abiko Baptist Church (BSAABC).
Respondent was appointed as an instructor at the Shinji Amari & Missionary Baptist
Institute and Seminary (MBIS; petitioner) effective June 1999.8
-
However, a Certification issued by MBIS Director Joel Nepomuceno states that
sometime during the schoolyear 2006-2007, respondent told Bishop Shinji Amari that
he cannot continue teaching due to the distance between San Carlos City, where his
mission work was, and MBIS, Minglanilla, Cebu. His appointment as volunteer
teacher was thereafter cancelled.9
-
Petitioners further claimed that since the Baptist Church was already successfully
organized and established at San Carlos City, respondent's mission was already
finished. Thus, BSAABC ordered him to be transferred to other areas of mission
work; but in defiance to the order, respondent refused without justifiable reason.
-
After investigation, it was discovered that respondent's refusal to leave San Carlos
City was because he had built his personal house on the land owned by BSAABC
without the latter's consent.
-
On November 20, 2011, after earnest efforts of negotiating with respondent and
giving him adequate opportunity to ventilate his side, the members of the BSAABC
unanimously voted to remove him as missionary and cancel his ABA
recommendation. He was informed of the decision in the November 24, 2011 Letter.
In the same letter, BSAABC demanded respondent to vacate the property as soon as
possible, and offered to buy the house erected thereon at the estimated cost of
building materials.
-
This prompted respondent to file a Complaint for Illegal Dismissal on September 10,
2012.
-
The LA found respondent's dismissal illegal.
-
The NLRC reversed the LA's ruling and dismissed the complaint on the ground of
lack of jurisdiction. It held simply that the expulsion of respondent from their
church was an ecclesiastical affair, and as such, has no remedy in civil courts.
-
On appeal to the CA, the NLRC's Decision and Resolution were reversed and set
aside. Accordingly, the LA's ruling was reinstated.

-
The CA ruled that both the LA and NLRC had jurisdiction over the matter. The
CA recognized that there may be a scenario where a minister is removed from his
employment as a consequence of his exclusion from the church. But in such
situation, the church, as employer, can and should deal with the employment
aspect separately and observe due process.
ISSUE: whether the CA erred in ruling that respondent was illegally dismissed despite
the fact that the dispute involves an ecclesiastical affair as the latter was a member of the
Abiko Baptist Church. YES.

Ruling:

To the mind of the Court, the exclusion of membership from Abiko Baptist Church in
Japan and the cancellation of ABA recommendation as a national missionary are
ecclesiastical matters which this jurisdiction will not touch upon. These matters are
exclusively determined by the church in accordance with the standards they have set.
The Court cannot meddle in these affairs since the church has the discretion to
choose members who live up to their religious standards. The ABA recommendation
as a national missionary is likewise discretionary upon the church since it is a matter
of governance of congregation.

We are left to determine whether respondent's removal as a missionary of Abiko Baptist

Church is an ecclesiastical affair.

Indeed, the matter of terminating an employee, which is purely secular in nature, is different
from the ecclesiastical act of expelling a member from the religious
congregation.26 Petitioners insist that this case is an ecclesiastical affair as there is no
employer-employee relationship between BSAABC/MBIS and respondent.

We do not agree. The use of the LA and CA of the Appointment Paper, as basis of the
employer-employee relationship in this case, is misplaced considering that
respondent failed to establish that such duties enumerated therein are the duties only
of a missionary. Again, the said document refers to respondent's status as an
instructor of MBIS.

Even then, this Court sees that respondent's appointment as instructor of petitioners'
own educational institution was by virtue of his membership with Abiko Baptist
Church. It is one of his duties as a missionary/minister of the same. He himself
admitted that he was teaching "bible history, philosophy, Christian doctrine, public
speaking, English and other religious subjects to seminarians in [MBIS intending] to
be [a] pastor/minister[.]"39 These subject matters and how they prepare or educate
their ministers are ecclesiastical in nature which the State cannot regulate unless
there is clear violation of secular laws. It follows, therefore, that even his alleged
exclusion as instructor is beyond the power of review by the State considering that
this is purely an ecclesiastical affair. It is up to the members of the religious
congregation to determine whether their minister still lives up to the beliefs they stand
for, continues to share his knowledge, and remains an exemplar of faith to the
members of their church.

True, the Mission Policy Agreement may show badges of control over its members and
missionaries; nevertheless, respondent, as member of the religious congregation, must be
subjected to a certain sense of control for the church to achieve the ends of its belief. As to
the power to order respondent to areas of mission work, the Court deems it appropriate not
to expound on this because aside from the fact that it is a mere allegation, it is also an
ecclesiastical matter as it concerns governance of the congregation.

Other than the Appointment Paper (as an instructor), no other evidence was adduced by
respondent to show an employer-employee relationship. Respondent, as the one alleging an
employer-employee relationship, failed to establish with clear and convincing evidence that
such relationship exists. With this, We do not see the need to discuss whether the dismissal
as a missionary was illegal as it is clearly an ecclesiastical affair.

Respondent is trying to confuse the Court in claiming that his appointment as instructor of
MBIS is basis of an employer-employee relationship while at the same time, claiming the
benefits accorded him as a missionary of BSAABC, such as the privilege to live on the
latter's property and the financial support he was receiving. Respondent obviously filed the
instant case to protect his property rights over the house he built on the land of BSAABC,
which is not within the ambit of a labor case. Then again, he was not able to sufficiently
prove the existence of an employer-employee relationship which is the first requirement to
claim relief in a labor case.

Admittedly, there is a thin line between secular and ecclesiastical matters with regard to
respondent's status as a missionary. Respondent's claim of illegal dismissal is dependent on
the existence of the employer-employee relationship. Unfortunately, respondent failed to
prove his own affirmative allegation.

Read: Art. 224