Lab Rel - Outline II Cases

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G.R. No. 106231 November 16, 1994

HAWAIIAN-PHILIPPINE COMPANY, petitioner,vs.REYNALDO J. GULMATICO, Labor Arbiter, Regional Arbitration Branch No. VI,AND NATIONAL FEDERATION OF SUGAR WORKERS-FOOD AND GENERALTRADES representing all the sugar farm workers of the HAWAIIAN PHILIPPINEMILLING DISTRICT, respondents.

Angara, Abella, Concepcion, Regala & Cruz for petitioner.

Manlapao, Ymballa and Chaves for private respondent.

BIDIN, J.:

This petition for certiorari and prohibition with preliminary injunction seeks to annul theOrder dated June 29, 1992 issued by public respondent Labor Arbiter Reynaldo J.Gulmatico denying petitioner's motion for "Claims on R.A. 809" in RAB VI Case No. 06-07-10256-89, the dispositive portion of which reads, in part:

WHEREFORE, premises considered, the motion to dismiss dated July31, 1989 and the supplement thereto dated September 19, 1989 filed byrespondent company together with the motion to dismiss filed byrespondent Ramon Jison dated August 27, 1990 and Francisco Jisondated September 20, 1990, respectively, are hereby DENIED.

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(Rollo, p. 59)

The antecedent facts are as follows:

On July 4, 1989, respondent union, the National Federation of Sugar Workers-Food andGeneral Trades (NFSW-FGT) filed RAB VI Case No. 06-07-10256-89 against hereinpetitioner Hawaiian-Philippine Company for claims under Republic Act 809 (The Sugar Act of 1952). Respondent union claimed that the sugar farm workers within petitioner'smilling district have never availed of the benefits due them under the law.

Under Section 9 of R.A 809, otherwise known as the Sugar Act of 1952, it is provided, to

wit:

Sec. 9. In addition to the benefits granted by the Minimum Wage Law, theproceeds of any increase in participation granted to planters under this Act and above their present share shall be divided between the planter and his laborers in the following proportions;

Sixty per centum of the increase participation for the laborers andforty per centum for the planters. The distribution of the sharecorresponding to the laborers shall be made under the supervision of theDepartment of Labor.

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(Emphasis supplied.)

On July 31, 1989, petitioner filed a "Motion to Dismiss," followed by a "SupplementalMotion to Dismiss" on September 19, 1989. Petitioner contended that public respondentLabor Arbiter has no jurisdiction to entertain and resolve the case, and that respondentunion has no cause of action against petitioner.

On August 23, 1989, respondent union filed an "Opposition to Motion to Dismiss."

On October 3,1989, petitioner applied a "Reply to Opposition" followed by a "Citation of Authorities in Support of Motion to Dismiss."

On December 20, 1989, respondent union filed an amended complaint additionallyimpleading as complainants Efren Elaco, Bienvenido Gulmatico, Alberto Amacio, NarcisoVasquez, Mario Casociano and all the other farm workers of the sugar planters millingwith petitioner from 1979 up to the present, and as respondents, Jose Maria Regalado,Ramon Jison, Rolly Hernaez, Rodolfo Gamboa, Francisco Jison and all other sugar planters milling their canes with petitioner from 1979 up to the present.

On August 27, 1990, Ramon Jison, one of the respondents impleaded in the amendedcomplaint, filed a "Motion to Dismiss and/or to Include Necessary Parties," praying for theinclusion as co-respondents of the Asociacion de Hacenderos de Silan-Saravia, Inc. andthe Associate Planters of Silay-Saravia, Inc.

On June 29, 1992, public respondent promulgated the assailed Order denyingpetitioner's Motion to Dismiss and Supplemental Motion to Dismiss.

Hence, this petition filed by Hawaiian-Philippine Company.

Petitioner reasserts the two lesson earlier raised in its Motion to Dismiss which publicrespondent unfavorably resolved in the assailed Order.

These two issues are first, whether public respondent Labor Arbiter has jurisdiction tohear and decide the case against petitioner; and the second, whether respondent unionand/or the farm workers represented by it have a cause of action against petitioner.

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

Art. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Exceptas otherwise provided under this Code, the Labor Arbiters shall haveoriginal and exclusive jurisdiction to hear and decide, within thirty (30)calendar days after the submission of the case by the parties for decisionwithout extension, even in the absence of stenographic notes, thefollowing cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;



3. If accompanied with a claim for reinstatement , those cases thatworkers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, includingquestions involving the legality of strikes and lockouts; and

6. Except claims for employees' compensation, social security, medicarefrom maternity benefits, all other claims arising from employer-employeerelations, including those of persons in domestic or household service,involving an amount exceeding Five Thousand Pesos (P5,000.00),whether or not accompanied with a claim for reinstatement. (Emphasissupplies)

In support of the contention that the Labor Arbiter has no jurisdiction to hear and decidethe case against petitioner, the latter cites the ruling in San Miguel Corporationvs. NLRC, 161 SCRA 719 [1988], wherein it was held that a single unifying element runsthrough the cases and disputes falling under the jurisdiction of the Labor Arbiter and thatis that all the enumerated cases and disputes arise out of or are in connection with anemployer-employee relationship, or some aspect or incident of such relationship.Likewise, in Federation of Free Farmers vs. Court of Appeals, 107 SCRA 411 [1981], thisCourt held that:

. . . . From the beginning of the sugar industry, the centrals have never had any privity with the plantation laborers, since they had their ownlaborers to take care of. . . . Nowhere in Republic Act 809 (the Sugar Act of 1952) can we find anything that creates any relationship between thelaborers of the planters and the centrals. . . .

. . . Under no principle of law or equity can we impose on the central . .

. any liability to the plantation laborers. . . . (Emphasis supplied)

On the strength of the aforecited authorities, petitioner contends that it is not a proper party and has no involvement in the case filed by respondent union as it is not theemployer of the respondent sugar workers.

Furthermore, to bolster its contention, petitioner cites the Rules and RegulationsImplementing RA 809 issued by the then Wage Administration Service pursuant to the

Administrative Order of the Labor Secretary dated October 1, 1952. Section 1 thereof states:

Sec. 1. The payment of the proceeds derived from the sixty per centum of any increase in the participation due the laborers shall be directly paid tothe individual laborer concerned at the end of each milling season by hisrespective planter under the Supervision of the Secretary of Labor or hisduly authorized representative by means of payrolls prepared by saidplanter. (Emphasis supplied)

In addition, under Letter of Instruction No. 854 dated May 1, 1979, it is provided:

1. Payment subject to supervision. The workers' share shall be paiddirectly by the planter concerned to the workers or claimants entitled



thereto subject to the supervision of the Minister of Labor or his dulydesignated representative.

The responsibility for the payment of the sugar workers' benefits under R.A. 809 wascategorically ruled upon in the Federation of Free Farmers case, supra., to wit:

. . . the matter of paying the plantation laborers of the respective plantersbecomes exclusively the concern of the planters, the laborers and theDepartment of Labor . Under no principle of law or equity can we imposeon the Central — here VICTORIAS any liability to the respective plantation laborers, should any of their respective planters-employers fail to pay their legal share. After all, since under the law it is the Departmentof Labor which is the office directly called upon to supervise suchpayment, it is but reasonable to maintain that if any blame is to be fixedfor the unfortunate situation of the unpaid laborers, the same shouldprincipally be laid on the planters and secondarily on the Department of Labor, but surely never on the central.

Whatever liability there exists between favor of the plantation laborersshould be pinned on the PLANTERS, their respective employers.(Emphasis supplied)

On the other hand, public respondent and respondent union maintain the position thatprivity exists between petitioner and the sugar workers. Actually, public respondent, inresolving petitioner's Motion to Dismiss, skirted the issue of whether an employer-employee relationship indeed exists between petitioner milling company and the sugar workers. He did not categorically rule thereon but instead relied on the observation thatwhen petitioner delivered to its planters the quedans representing its share, petitioner didnot first ascertain whether the shares of all workers or claimants were fully paid/coveredpursuant to LOI No. 854, and that petitioner did not have the necessary certification from

the Department of Labor attesting to such fact of delivery. In view of these observations,public respondent subscribed to the possibility that petitioner may still have a liability vis-a-vis the workers' share. Consequently, in order that the workers would not have tolitigate their claim separately, which would be tantamount to tolerating the splitting of acause of action, public respondent held that petitioner should still be included in this caseas an indispensable party without which a full determination of this case would not beobtained.

We find for petitioner.

The Solicitor General, in its adverse Comment, correctly agreed with petitioner'scontention that while the jurisdiction over controversies involving agricultural workers has

been transferred from the Court of Agrarian Relations to the Labor Arbiters under theLabor Code as amended, the said transferred jurisdiction is however, not withoutlimitations. The dispute or controversy must still fall under one of the cases enumeratedunder Article 217 of the Labor Code, which cases, as ruled in San Miguel, supra., ariseout of or are in connection with an employer-employee relationship.

In the case at bar, it is clear that there is no employer-employee relationship betweenpetitioner milling company and respondent union and/or its members-workers, a factwhich, the Solicitor General notes, public respondent did not dispute or was silent about. Absent the jurisdictional requisite of an employer-employee relationship betweenpetitioner and private respondent, the inevitable conclusion is that public respondent iswithout jurisdiction to hear and decide the case with respect to petitioner.



Anent the issue of whether respondent union and/or its members-workers have a causeof action against petitioner, the same must be resolved in the negative. To have a causeof action, the claimant must show that he has a legal right and the respondent acorrelative duty in respect thereof, which the latter violated by some wrongful act or omission (Marquez vs. Varela, 92 Phil. 373 [1952]). In the instant case, a simple readingof Section 9 of R.A. 809 and Section 1 of LOI 845 as aforequoted, would show that the

payment of the workers' share is a liability of the planters-employers, and not of themilling company/sugar central. We thus reiterate Our ruling on this matter, as enunciatedin Federation of Free Farmers, supra., to wit:

. . . . Nowhere in Republic Act No. 809 can we find anything that createsany relationship between the laborers of the planters and the centrals.Under the terms of said Act, the old practice of the centrals issuing thequedans to the respective PLANTERS for their share of the proceeds of milled sugar per their milling contracts has not been altered or modified.In other words, the language of the Act does not in any manner make thecentral the insurer on behalf of the plantation laborers that the latter'srespective employers-planters would pay them their share. . . .

. . . . Accordingly, the only obligation of the centrals (under Section 9 of the Act), like VICTORIAS, is to give to the respective planters, likePLANTERS herein, the planters' share in the proportion stipulated in themilling contract which would necessarily include the portion of 60%pertaining to the laborers. Once this has been done, the central is alreadyout of the picture. . . . (Emphasis supplied)

In the case at bar, it is disputed that petitioner milling company has already distributed toits planters their respective shares. Consequently, petitioner has fulfilled its part and hasnothing more to do with the subsequent distribution by the planters of the workers' share.

Public respondent's contention that petitioner is an indispensable party is not supportedby the applicable provisions of the Rules of Court. Under Section 7, Rule 3 thereof,indispensable parties are "parties in interest" without whom no final determination of theaction can be obtained. In this case, petitioner cannot be deemed as a party in interestsince there is no privity or legal obligation linking it to respondent union and/or itsmembers-workers.

In order to further justify petitioner's compulsory joinder as a party to this case, publicrespondent relies on petitioners' lack of certification from the Department of Labor of itsdelivery of the planters' shares as evidence of an alleged "conspicuous display of concerted conspiracy between the respondent sugar central (petitioner) and its adherentplanters to deprive the workers or claimants of their shares in the increase in participation

of the adherent planters." (Rollo, p. 56)

The assertion is based on factual conclusions which have yet to be proved. And evenassuming for the sake of argument that public respondent's conclusions are true,respondent union's and/or its workers' recourse lies with the Secretary of Labor, uponwhom authority is vested under RA 809 to supervise the payment of the workers' shares. Any act or omission involving the legal right of the workers to said shares may be actedupon by the Labor Secretary either motu proprio or at the instance of the workers. In thiscase however, no such action has been brought by the subject workers, thereby raisingthe presumption that no actionable violation has been committed.

Public respondent is concerned that the respondent planters may easily put up the

defense that the workers' share is with petitioner milling company, giving rise tomultiplicity of suits. The Solicitor General correctly postulates that the planters cannot



legally set up the said defense since the payment of the workers' share is a directobligation of the planters to their workers that cannot be shifted to the miller/central.Furthermore, the Solicitor General notes that there is nothing in RA 809 which suggestsdirectly or indirectly that the obligation of the planter to pay the workers' share isdependent upon his receipt from the miller of his own share. If indeed the planter did notreceive his just and due share from the miller, he is not without legal remedies to enforce

his rights. The proper recourse against a reneging miller or central is for the planter toimplead the former not as an indispensable party but as a third party defendant under Section 12, Rule 6 of the Rules of Court. In such case, herein petitioner milling companywould be a proper third party dependent because it is directly liable to the planters (theoriginal defendants) for all or part of the workers' claim. However, the planters involved inthis controversy have not filed any complaint of such a nature against petitioner, therebylending credence to the conclusion that petitioner has fulfilled its part vis-a-vis itsobligation under RA 809.

WHEREFORE, premises considered, the petition is GRANTED. Public respondentReynaldo J. Gulmatico is hereby ORDERED to DISMISS RAB VI Case No. 06-07-10256-89 with respect to herein petitioner Hawaiian-Philippine Company and to PROCEED

WITH DISPATCH in resolving the said case.

SO ORDERED.

[G.R. No. 117650. March 7, 1996]

SULPICIO LINES, INC., pet i t ioner, vs. NATIONAL LABORRELATIONS COMMISSION and JAIMECAGATAN, respondents.

D E C I S I O N

KAPUNAN, J .:

Petitioner Sulpicio Lines, Inc., owner of MV Cotabato Princess, onJanuary 15, 1992 dismissed private respondent Jaime Cagatan,

a messman of the said vessel, allegedly for being absent withoutleave for a ―prolonged‖ period of six (6) months.

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

Responding to the said complaint, petitioner, on June 25, 1992,filed a Motion to Dismiss on the ground of improper venue, stating,

among other things, that the case for illegal dismissal should have

http://sc.judiciary.gov.ph/jurisprudence/1996/mar1996/117650.htm#_edn1






been lodged with the NLRC‘s Regional Branch No. VII (Cebu), as itsmain office was located in Cebu City.[2]

In an Order dated August 21, 1992 Labor Arbiter Arthur L. Amansec of the NLRC-NCR denied petitioner‘s Motion to Dismiss,

holding that:

Considering that the complainant is a ship steward, traveled on board

respondent‟s ship along the Manila-Enstancia-Iloilo-Zamboanga-Cotabato vice-versa route, Manila can be said to be part of the

complainant‟s territorial workplace.[3]

The aforequoted Order was seasonably appealed to the NLRC bypetitioner. On February 28, 1994, respondent NLRC foundpetitioner‘s appeal unmeritorious and sustained the Labor Arbiter‘s

August 21, 1992 ruling, explaining that ―under the New NLRC Rules,the Commission or the Labor Arbiter before whom the case ispending may order a change of venue.‖[4] Finding no grave abuse of discretion in the Labor Arbiter‘s assailed Order, respondent NLRCemphasized that:

[T]he complainant instituted the Action in Manila where he resides. Hence,

we see no grave abuse of discretion on the part of the labor arbiter indenying the respondent‟s Motion to Dismiss as Wefind support in the basic

principle that the State shall afford protection to labor and that the NLRC isnot bound by strict technical rules of procedure.[5]

Undaunted, petitioner sought a reconsideration of the aboveOrder, which the public respondent denied in its Resolution datedJuly 22, 1994.[6] Consequently, petitioner comes to this Court for relief, in the form of a Special Civil Action for Certiorari under Rule 65of the Rules of Court, contending that public respondent NLRC actedwith grave abuse of discretion amounting to lack or excess of

jurisdiction when it issued its assailed rulings.[7]

It is petitioner‘s principal contention that a ship or vessel asworkplace is an extension of its homeport or principal place of business, and that ―being part of the territory of the homeport, (such)vessel is governed to a large extent by the laws and is under the

jurisdiction of the homeport.[8] Based on this submission, petitioner avers that its vessel-as-workplace is ―under the territorial jurisdictionof the Regional Arbitration branch where (its) . . . principal office islocated,‖ which is Branch VII, located in Cebu City.[9]

We disagree.



































As early as 1911, this Court held that the question of venueessentially relates to the trial and touches more upon theconvenience of the parties, rather than upon the substance andmerits of the case.[10] Our permissive rules underlying provisions on

venue are intended to assure convenience for the plaintiff and hiswitnesses and to promote the ends of justice. This axiom all themore finds applicability in cases involving labor and managementbecause of the principle, paramount in our jurisdiction, that the Stateshall afford full protection to labor .[11]

Even in cases where venue has been stipulated by the parties bycontract, this Court has not hesitated to set aside agreements onvenue if the same would lead to a situationso grossly inconvenient toone party as to virtually negate his claim. In Sweet Linesvs. Teves,[12] involving a contract of adhesion, we held that:

An agreement will not be held valid where it practically negates the action

of the claimants, such as the private respondents herein. The philosophyunderlying the provisions on transfer of venue of actions is the convenience

of the plaintiffs as well as his witnesses and to promote the ends of

justice. Considering the expense and trouble a passenger residing

outside Cebu City would incur to prosecute a claim in the City of Cebu, hewould most probably decide not to file the action at all. The condition will

thus defeat, instead of enhance, the ends of justice. Upon the other hand,

petitioner had branches or offices in the respective ports of call of thevessels and can afford to litigate in any of these places. Hence, the filing of

the suit in the CFI of Misamis Oriental, as was done in the instant case will

not cause inconvenience to, much less prejudice petitioner .[13]

In the case at bench, it is not denied that while petitioner maintains its principal office in Cebu City, it retains a major bookingand shipping office in Manila from which it earns considerablerevenue, and from which it hires and trains a significant number of itsworkforce. Its virulent insistence on holding the proceedings in

the NLRC‘s regional arbitration branch in Cebu City is obviously aploy to inconvenience the private respondent, a mere steward whoresides in Metro Manila, who would obviously not be able to affordthe frequent trips to Cebu City in order to follow up his case.

Even the provisions cited by petitioner in support of its contentionthat venue of the illegal dismissal case lodged by private respondentis improperly laid, would not absolutely support his claim thatrespondent NLRC acted with grave abuse of discretion in allowingthe private respondent to file his case with the NCR arbitration

branch.





















The sole issue in this special civil action for certiorari is whether or not the courts maytake cognizance of claims for damages arising from a labor controversy.

The antecedent facts are not disputed.

On July 1, 1977, the Commercial Bank and Trust Company, a Philippine bankinginstitution, entered into a collective bargaining agreement with the Commercial Bank andTrust Company Union, representing the rank and file of the bank with a membership of over one thousand employees, and an affiliated local of the National Union of BankEmployees, a national labor organization.

The agreement was effective until June 30, 1980, with an automatic renewal clause untilthe parties execute a new agreement.

On May 20, 1980, the union, together with the National Union of Bank Employees,submitted to the bank management proposals for the renegotiation of a new collectivebargaining agreement. The following day, however, the bank suspended negotiationswith the union. The bank had meanwhile entered into a merger with the Bank of thePhilippine Islands, another Philippine banking institution, which assumed all assets andliabilities thereof.

As a consequence, the union went to the then Court of First Instance of Manila, presidedover by the respondent Judge, on a complaint for specific performance, damages, andpreliminary injunction against the private respondents. Among other things, the complaintcharged:

xxx xxx xxx

51. In entering in to such arrangement for the termination of the

CURRENT CBA, and the consequent destruction to existing rights,interests and benefits thereunder,CBTC is liable for wilful injury to thecontract and property rights thereunder as provided in Article 2220 of theCivil Code of the Philippines;

52. By arranging for the termination of the CURRENT CBA in the manner above described, CBTC committed breach of said contract in bad faith, inthat CBTC had taken undue advantage of its own employees, byconcealing and hiding the negotiations towards an agreement on thesales and merger, when it was under a statutory duty to disclose andbargain on the effects thereof, according to law;

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54. In virtually suppressing the collective bargaining rights of plaintiffsunder the law and as provided in the CURRENT CBA, through shadowbargaining, calculated delay, suspension of negotiations, concealment of bargainable issues and high-handed dictation, the CBTC and itsdefendant officials, as well as the BANK OF P.I. and its defendantofficials, were all actuated by a dishonest purpose to secure an undueadvantage; on the part of the CBTC it was to avoid fresh and additionalcontractual commitments, which would substantially lessen and diminishthe profitability of the sale; and on the part of the BANKOF P.I., it was toavoid having to face higher compensation rates of CBTC employees in

the course of integration and merger which could force the upgrading of the benefit package for the personnel of the merged operations, andthereby pushed personnel costs upwards; substantial outlays and costs



thereby entailed were all deftly avoided and evaded, through theexpedient of deliberate curtailment and suppression of contractualbargaining rights;

55. All the other defendants have actively cooperated with and abetted theCBTC and its defendant officers in negotiating, contriving and effecting the

above arrangements for the attainment of its dishonest purpose, for abuse of its rights, and for taking undue advantage of its very own employees, throughthe secret sale and scheduled merger; the collective participation thereinevinces machination, deceit, wanton attitude, bad faith, and oppressiveintent, wilfully causing loss or injury to plaintiffs in a manner that is contrary tolaw, morals, good customs and public policy, in violation of Articles 21 and 28of the Civil Code; 1

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Predictably, the private respondents moved for the dismissal of the case on the ground,essentially, of lack of jurisdiction of the court.

On November 26, 1980, the respondent Judge issued an order, dismissing the case for lack of jurisdiction. According to the court, the complaint partook of an unfair labor practice dispute notwithstanding the incidental claim for damages, jurisdiction over whichis vested in the labor arbiter. This order, as well as a subsequent one denyingreconsideration, is now alleged as having been issued 'in excess of his jurisdictionamounting to a grave abuse of discretion."

We sustain the dismissal of the case, which is, as correctly held by the respondent court,an unfair labor practice controversy within the original and exclusive jurisdiction of thelabor arbiters and the exclusive appellate jurisdiction of the National Labor RelationsCommission. The claim against the Bank of Philippine Islands — the principal respondent

according to the petitioners — for allegedly inducing the Commercial Bank and TrustCompany to violate the existing collective bargaining agreement in the process of re-negotiation, consists mainly of the civil aspect of the unfair labor practice charge referredto under Article 247 2 of the Labor Code.

Under Article 248 3 of the Labor Code, it shall be an unfair labor practice:

(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;

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(g) To violate the duty to bargain collectively as prescribed by this Code;

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The act complained of is broad enough to embrace either provision. Since it involvescollective bargaining — whether or not it involved an accompanying violation of the CivilCode — it may rightly be categorized as an unfair labor practice. The civil implicationsthereof do not defeat its nature as a fundamental labor offense.

As we stated, the damages (allegedly) suffered by the petitioners only form part of thecivil component of the injury arising from the unfair labor practice. Under Article 247 of the Code, "the civil aspects of all cases involving unfair labor practices, which mayinclude claims for damages and other affirmative relief, shall be under the jurisdiction of the labor arbiters. 4



The petitioners' claimed injury as a consequence of the tort allegedly committed by theprivate respondents, specifically, the Bank of the Philippine Islands, under Article 1314 of the Civil Code, 5 does not necessarily give the courts jurisdiction to try the damage suit.Jurisdiction is conferred by law 6 and not necessarily by the nature of the action. Civilcontroversies are not the exclusive domain of the courts. In the case at bar, PresidentialDecree No. 442, as amended by Batas Blg. 70, has vested such a jurisdiction upon the

labor arbiters, a jurisdiction the courts may not assume.

Jurisdiction over unfair labor practice cases, moreover, belongs generally to the labor department of the government, never the courts. In Associated Labor Union v.Gomez, 7 we said:

A rule buttressed upon statute and reason that is frequently reiterated in jurisprudence is that labor cases involving unfair practice are within theexclusive jurisdiction of the CIR. By now, this rule has ripened intodogma. It thus commands adherence, not breach.

The fact that the Bank of the Philippine Islands is not a party to the collective bargainingagreement, for which it "cannot be sued for unfair labor practice at the time of theaction," 8 cannot bestow on the respondent court the jurisdiction it does not have. InCebu Portland Cement Co. v. Cement Workers' Union, 9 we held:

xxx xxx xxx

There is no merit in the allegation. In the first place, it must be rememberedthat jurisdiction is conferred by law; it is not determined by the existence of anaction in another tribunal. In other words, it is not filing of an unfair labor casein the Industrial Court that divests the court of first instance jurisdiction over actions properly belonging to the former. It is the existence of a controversythat properly falls within the exclusive jurisdiction of the Industrial Court and

to which the civil action is linked or connected that removes said civil casefrom the competence of the regular courts. It is for this reason that civilactions found to be intertwined with or arising out of, a dispute exclusivelycognizable by the Court of Industrial Relations were dismissed, even if thecases were commenced ahead of the unfair labor practice proceeding, and

jurisdiction to restrain picketing was decreed to belong to the Court of Industrial Relations although no unfair labor practice case has as yet beeninstituted. For the court of first instance to lose authority to pass upon a case,therefore, it is enough that unfair labor practice case is in fact involved in or attached to the action, such fact of course being established by sufficientproof. 10

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Furthermore, to hold that the alleged tortious act now attributed to the Bank of thePhilippine Islands may be the subject of a separate suit is to sanction split jurisdictionlong recognized to be an offense against the orderly administration of justice. As stated inNolganza v. Apostol: 11

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As far back as Associated Labor Union vs. Gomez [L-25999, February 9,1967, 19 SCRA 304] the exclusive jurisdiction of the Court of IndustrialRelations in disputes of this character was upheld. "To hold otherwise,"

as succinctly stated by the ponente, Justice Sanchez, "is to sanction split jurisdiction-which is obnoxious to the orderly administration of justice."Then, in Progressive Labor Association vs. Atlas Consolidated Mining



and Development Corporation [L-27585, May 29, 1970, 33 SCRA 349]decided three years later, Justice J.B.L. Reyes, speaking for the Court,stressed that to rule that such demand for damages is to be passed uponby the regular courts of justice, instead of leaving the matter to the Courtof Industrial Relations, 'would be to sanction split jurisdiction, which isprejudicial to the orderly administration of justice'. Thereafter, this Court,

in the cases of Leoquinco vs. Canada Dry Bottling Co. [L-28621,February 22, 1971, 37 SCRA 535] and Associated Labor Union v. Cruz([L-28978, September 22, 1971, 41 SCRA 12], with the opinions comingfrom the same distinguished jurist, adhered to such a doctrine. The latestcase in point, as noted at the outset, is the Goodrich Employees Association decision [L-30211, October 5, 1976, 73 SCRA 297].

xxx xxx xxx

The petitioners' reliance upon Calderon v. Court of Appeals 12 is not well-taken. Calderonhas since lost its persuasive force, beginning with our ruling in PEPSI-COLA BOTTLINGCOMPANY v. MARTINEZ, 13 EBON v. DE GUZMAN, 14 and AGUSAN DEL NORTE

ELECTRIC COOP., INC. v. SUAREZ, 15 and following the promulgation of PresidentialDecree No. 1691, restoring the jurisdiction to decide money claims unto the labor arbiters.

Neither does the fact that the Bank of the Philippine Islands "was not an employer at thetime the act was committed' abate a recourse to the labor arbiter. It should be notedindeed that the Bank of the Philippine Islands assumed "all the assets and liabilities" 16 of the Commercial Bank and Trust Company. Moreover, under the Corporation Code:

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5. The surviving or consolidated corporation shall be responsible and liable

for all the liabilities and obligations of each of the constituent corporations inthe same manner as if such surviving or consolidated corporation had itself incurred such liabilities or obligations; and any claim, action or proceedingpending by or against any of such constituent corporations may beprosecuted by or against the surviving or consolidated corporation, as thecase may be. Neither the rights of creditors nor any lien upon the property of any of such constituent corporations shall be impaired by such merger or consolidation. 17

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In sum, the public respondent has not acted with grave abuse of discretion.

WHEREFORE, the petition is DISMISSED. No costs.

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

ALBERTO S. SILVA, EDILBERTO VIRAY, ANGELES BARON,CEFERINO ROMERO, JAIME ACEVEDO, RODOLFO

JUAN, ANDREW DE LA ISLA, BAYANI PILAR,ULDARICO GARCIA, ANANIAS HERMOCILLA, WALLY



LEONES, PABLO ALULOD, RODOLFO MARIANO,HERNANI ABOROT, CARLITO CHOSAS, VALERIANOMAUBAN, RENAN HALILI, MANOLITO CUSTODIO,NONILON DAWAL, RICARDO ESCUETA, SEVERINO

ROSETE, ERNESTO LITADA, ERNESTO BARENG,BONIFACIO URBANO, VICENTE SANTOS, MARIOCREDO, BERNABE GERONIMO, ERNESTO BANAY,PASTOR VELUZ, RICARDO CUEVAS, FELOMENOBALLON, ORLANDO MENDOZA, ANICETO ARBAN,GERONIMO ESPLANA, VICENTE CHAVEZ, STEVEVELECINA, and RICARDO B. VENTURA,pet i t ioners, vs .NATIONAL LABOR RELATIONS COMMISSION andPHILTREAD (FIRESTONE) TIRE AND RUBBER

CORPORATION,respondents.

D E C I S I O N

ROMERO, J .:

Petitioners, all former employees of private respondent Philtread(Firestone) Tire and Rubber Corporation (Philtread, for brevity),impute grave abuse of discretion on the National Labor RelationsCommission (NLRC)[1] for issuing two resolutions, dated April 7, 1993,and November 18, 1992, which reconsidered a resolution it rendered

on April 15, 1992. They allege that its resolution of April 15, 1992became final and executory when Philtread failed to seasonably file amotion for reconsideration within the ten-day reglementary periodrequired by Article 223 of the Labor Code.

The record unfolds the following facts:

Sometime in 1985, petitioners, then rank-and-file employees andmembers of Philtread Workers Union (PWU), volunteered for, andavailed of, the retrenchment program instituted by Philtread with theunderstanding that they would have priority in re-employment in theevent that the company recovers from its financial crisis, inaccordance with Section 4, Article III of the Collective Bargaining

Agreement concluded on July 5, 1983.[2]

In November 1986, Philtread, apparently having recovered fromits financial reverses, expanded its operations and hired newpersonnel. Upon discovery of this development, petitioners filed their respective applications for employment with Philtread, whichhowever, merely agreed to consider them for futurevacancies. Subsequent demands for re-employment made bypetitioners were ignored. Even the request of the incumbent union

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for Philtread to stop hiring new personnel until petitioners were firsthired failed to elicit any favorable response.

Thus, on December 5, 1988, petitioners lodged a complaint[3] withthe National Capital Region Arbitration Branch of the NLRC for unfair

labor practice (ULP), damages and attorney‘s fees against Philtread.

Both parties submitted their respective position papers. On itspart, Philtread moved for the dismissal of the complaint based on twogrounds, namely: (1) that the NLRC lacked jurisdiction, there beingno employer-employee relationship between it and petitioners andthat the basic issue involved was the interpretation of a contract, theCBA, which was cognizable by the regular courts; and (2) thatpetitioners had no locus standi, not being privy to the CBA executedbetween the union and Philtread.

Petitioners, however, challenging Philtread‘s motion to dismiss,stressed that the complaint was one for unfair labor practiceprecipitated by the unjust and unreasonable refusal of Philtread to re-employ them, as mandated by the provisions of Section 4, Article IIIof the 1986 and 1983 CBAs. Being one for unfair labor practice,petitioners concluded that the NLRC had jurisdiction over the case,pursuant to Article 217 (a) (1) of the Labor Code.

On August 31, 1989, Labor Arbiter Edgardo M. Madriagarendered a decision dismissing the complaint but directing Philtread

to give petitioners priority in hiring, as well as those former employees similarly situated for available positions provided theymeet the necessary current qualifications.[4] In dismissing thecomplaint, the Labor Arbiter, however, did not tackle the jurisdictionalissue posed by Philtread in its position paper. Instead, he dweltsolely on the question whether the petitioners were entitled to priorityin re-employment on the basis of the CBA.

Petitioners duly appealed the decision of the Labor Arbiter to theNLRC. Philtread opted not to interpose an appeal despite the Labor

Arbiter‘s failure to rule squarely on the question of jurisdiction.

On April 15, 1992, the NLRC issued a resolution reversing thedecision of the Labor Arbiter. It directed Philtread to re-employpetitioners and other employees similarly situated, regardless of agequalifications and other pre-employment conditions, subject only toexisting vacancies and a finding of good physical condition. Thisresolution was received by Atty. Abraham B. Borreta of the law firmof Borreta, Gutierrez and Leogardo on May 5, 1992, as shown by thebailiff‘s return.











Subsequently, Atty. Borreta filed with the NLRC on May 20, 1992,an ex parte manifestation explaining that he was returning the copyof the resolution rendered on April 15, 1992, which, according to him,was erroneously served on him by the process server of the

NLRC. He alleged that in the several conciliation conferences held, itwas Atty. Daniel C. Gutierrez who exclusively handled the case onbehalf of Philtread and informed the Labor Arbiter and petitioners thatthe law firm of Borreta, Gutierrez and Leogardo had already beendissolved.

Being of the impression that the April 15, 1992 resolution of theNLRC had been properly served at the address of the law firm of

Atty. Gutierrez and that no seasonable motion for reconsiderationwas ever filed by Philtread, petitioners moved for its execution.

On November 18, 1992, the NLRC, acting on a motion for reconsideration filed by Atty. Gutierrez, promulgated one of itschallenged resolutions dismissing the complaint of petitioners. Itruled that while petitioners had standing to sue, the complaint shouldhave been filed with the voluntary arbitrator, pursuant to Article 261of the Labor Code, since the primary issue was the implementationand interpretation of the CBA.

Dismayed by the NLRC‘s sudden change of position, petitionersimmediately moved for reconsideration. They pointed out that the

NLRC‘s reliance on Article 261 of the Labor Code was patentlyerroneous because it was the amended provision which was beingcited by the NLRC. They added that the amendment of Article 261introduced by Republic Act No. 6715 took effect only on March 21,1989, or after the filing of the complaint on December 5, 1988. Thisbeing the case, petitioners argued that the subsequent amendmentcannot retroactively divest the Labor Arbiter of the jurisdiction alreadyacquired in accordance with Articles 217 and 248 of the Labor Code.Petitioners further stressed that the resolution of April 15, 1992, hadalready become final and executory since Philtread‘s counsel of

record did not file any motion for reconsideration within the period of ten (10) days from receipt of the resolution on May 5, 1992.

The NLRC, however, was not convinced by petitioners‘assertions. In another resolution issued on April 7, 1993, it affirmedits earlier resolution dated November 18, 1992, ruling that evenbefore the amendatory law took effect, matters involving bargainingagreements were already within the exclusive jurisdiction of thevoluntary arbitrator, as set forth in Article 262 of the Labor Code. Hence, this petition.



As stated at the outset, petitioners fault the NLRC for issuing theassailed resolutions even when the resolution sought to bereconsidered had already attained finality upon Philtread‘s failure totimely move for its reconsideration. They posit that since the bailiff‘s

return indicated May 5, 1992, as the date of receipt of the April 15,1992 resolution by the law firm of Borreta, Gutierrez and Leogardo,Philtread‘s counsel of record, then Philtread only had ten (10)calendar days or until May 15, 1992, within which to file a motion for reconsideration. Since Philtread indisputably failed to file any suchmotion within said period, petitioners deemed it highly irregular andcapricious for the NLRC to still allow reconsideration of its April 15,1992 resolution.

The petition is impressed with merit.

Time and again, this Court has been emphatic in ruling that theseasonable filing of a motion for reconsideration within the 10-dayreglementary period following the receipt by a party of any order,resolution or decision of the NLRC, is a mandatory requirement toforestall the finality of such order, resolution or decision.[5] Thestatutory bases for this is found in Article 223 of the Labor Code [6] andSection 14, Rule VII of the New Rules of Procedure of the NationalLabor Relations Commission.[7]

In the case at bar, it is uncontroverted that Philtread‘s counsel

filed a motion for reconsideration of the April 15, 1992 resolution onlyon June 5, 1992,[8] or 31 days after receipt of said resolution.[9] It wasthus incumbent upon the NLRC to have dismissed outrightPhiltread‘s late motion for reconsideration. By doing exactly theopposite, its actuation was not only whimsical and capricious but alsoa demonstration of its utter disregard for its very ownrules. Certiorari , therefore, lies.

To be sure, it is settled doctrine that the NLRC, as anadministrative and quasi-judicial body, is not bound by the rigid

application of technical rules of procedure in the conduct of itsproceedings.[10] However, the filing of a motion for reconsideration andfiling it ON TIME are not mere technicalities of procedure. These are

jurisdictional and mandatory requirements which must be strictlycomplied with. Although there are exceptions to said rule, the caseat bar presents no peculiar circumstances warranting a departuretherefrom.

The Court is aware of Philtread‘s obvious attempt to skirt therequirement for seasonable filing of a motion for reconsideration by

persuading us that both the Labor Arbiter and the NLRC have no jurisdiction over petitioners‘ complaint. Jurisdiction, Philtread claims,


























lies instead with the voluntary arbitrator so that when the Labor Arbiter and the NLRC took cognizance of the case, their decisionsthereon were null and void and, therefore, incapable of attainingfinality. In short, Philtread maintains that the ten-day reglementary

period could not have started running and, therefore, its motion couldnot be considered late.

The argument is not tenable. While we agree with the dictum thata void judgment cannot attain finality, said rule, however, is onlyrelevant if the tribunal or body which takes cognizance of a particular subject matter indeed lacks jurisdiction over the same. In this case,the rule adverted to is misapplied for it is actually the Labor Arbiter and the NLRC which possess jurisdiction over petitioners‘ complaintand NOT the voluntary arbitrator, as erroneously contended byPhiltread.

In this regard, we observe that there is a confusion in the mindsof both Philtread and the NLRC with respect to the proper jurisdictionof the voluntary arbitrator. They appear to share the view that oncethe question involved is an interpretation or implementation of CBAprovisions, which in this case is the re-employment clause, then thesame necessarily falls within the competence of the voluntaryarbitrator pursuant to Article 261 of the Labor Code.

Respondents‘ posture is too simplistic and finds no support in law

or in jurisprudence. When the issue concerns an interpretation or implementation of the CBA, one cannot immediately jump to theconclusion that jurisdiction is with the voluntary arbitrator. There isan equally important need to inquire further if the disputants involvedare the union and the employer; otherwise, the voluntary arbitrator cannot assume jurisdiction. To this effect was the ruling of the Courtin Sanyo Philippines Workers Union - PSSLU v. Canizares,[11] wherewe clarified the jurisdiction of the voluntary arbitrator in this manner:

“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 recommendationof 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) CollectiveBargaining 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 grievancemachinery and voluntary arbitrator states that „(t)he parties to a Collective







Bargaining Agreement shall include therein provisions that will ensure themutual 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 shallautomatically 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, onlydisputes involving the union and the company shall be referred to the

grievance machinery or voluntary arbitrators.” (Underscoring supplied)

Since the contending parties in the instant case are not the unionand Philtread, then pursuant to the Sanyo doctrine, it is not thevoluntary arbitrator who can take cognizance of the complaint,notwithstanding Philtread‘s claim that the real issue is theinterpretation of the CBA provision on re-employment.

The Court, however, does not write finis to the discussion. Amore important question arises: If the voluntary arbitrator could nothave assumed jurisdiction over the case, did the Labor Arbiter andthe NLRC validly acquire jurisdiction when both of them entertained

the complaint? A brief review of relevant statutory provisions is in order.

We note that at the time petitioners filed their complaint for unfair labor practice, damages and attorney‘s fees on December 5, 1988,the governing provision of the Labor Code with respect to the

jurisdiction of the Labor Arbiter and the NLRC was Article 217 whichstates:

“ART. 217. Jurisdiction of Labor Arbiters and the

Commission. (a) The Labor Arbiters shall have the original andexclusive jurisdiction to hear and decide within thirty (30) workingdays after submission of the case by the parties for decision, thefollowing cases involving all workers, whether agricultural or non-

agricultural:

1. Unfair labor practice cases;

2. Those that workers may file involving wages, hours of work and other terms and conditions of employment;



3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other

benefits provided by law or appropriate agreement, except claims for

employees‟ compensation, social security, medicare and maternity benefits;

4. Cases involving household services; and

5. Cases arising from any violation of Article 265 of this Code, including

questions involving the legality of strikes and lockouts.

(b) The Commission shall have exclusive appellate jurisdiction over all

cases decided by Labor Arbiters.”

Articles 261 and 262, on the other hand, defined the jurisdiction of

the voluntary arbitrator, viz.:

“ART. 261. Grievance machinery. - Whenever a grievance arises from theinterpretation or implementation of a collective agreement, includingdisciplinary actions imposed on members of the bargaining unit, the

employer and the bargaining representative shall meet to adjust the

grievance. Where there is no collective agreement and in cases where thegrievance procedure as provided herein does not apply, grievances shall be

subject to negotiation, conciliation or arbitration as provided elsewhere inthis Code.

ART. 262. Voluntary arbitration. - All grievances referred to in theimmediately preceding Article which are not settled through the grievance

procedure provided in the collective agreement shall be referred to voluntary

arbitration prescribed in said agreement: Provided, That termination disputesshall be governed by Article 278 of this Code, as amended, unless the parties

agree to submit them to voluntary arbitration.”

Under the above provisions then prevailing, one can understandwhy petitioners lodged their complaint for ULP with the Labor

Arbiter. To their mind, Philtread‘s refusal to re-employ them wastantamount to a violation of the re-employment clause in the 1983CBA which was also substantially reproduced in the 1986 CBA. Atthe time, any violation of the CBA was unqualifiedly treated as ULP of the employer falling within the competence of the Labor Arbiter tohear and decide. Thus:

“ART. 248. Unfair labor practices of employers. - It shall be

unlawful for an employer to commit any of the following unfair labor practice:



x x x x xx x x x

(i) To violate a collective bargaining agreement.”

On March 21, 1989, however, Republic Act 6715,[12] or the so-called ―Herrera-Veloso Amendments,‖ took effect, amending severalprovisions of the Labor Code, including the respective jurisdictions of the Labor Arbiter, the NLRC and the voluntary arbitrator. As aresult, the present jurisdiction of the Labor Arbiter and the NLRC isas follows:

“ART. 217. Jurisdiction of Labor Arbiters and the Commission. - (a) Exceptas otherwise provided under this Code the Labor Arbiters shall have original

and exclusive jurisdiction to hear and decide, within thirty (30) calendar daysafter the submission of the case by the parties for decision without extension,

even in the absence of stenographic notes, the following cases involving all

workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;2. Termination disputes;

3. If accompanied with a claim for reinstatement, those casesthat workers may file involving wages, rates of pay, hours of

work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;

5. Cases arising from any violation of Article 264 of thisCode, including questions involving the legality of strikes and

lockouts; and

6. Except claims for Employees Compensation, Social Security,Medicare and maternity benefits, all other claims, arising fromemployer-employee relations, including those of persons in

domestic or household service, involving an amount exceeding fivethousand pesos (P5,000.00) regardless of whether accompanied with

a claim for reinstatement.

(b) The Commission shall have exclusive appellate

jurisdiction over all cases decided by Labor Arbiters.

(c) Cases arising from the interpretation or implementation of collective

bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the

Labor Arbiter by referring the same to the grievance machinery and

voluntary arbitration as may be provided in said agreements.”

while that of the voluntary arbitrator is defined in this wise:







“ART. 261. Jurisdiction of Voluntary Arbitrators or panel of VoluntaryArbitrators. - The Voluntary Arbitrator or panel of Voluntary Arbitrators

shall have original and exclusive jurisdiction to hear and decide all

unresolved grievances arising from the interpretation or implementation of

the Collective Bargaining Agreement and those arising from theinterpretation or enforcement of company personnel policies referred to in

the immediately preceding article. Accordingly, violations of a Collective

Bargaining Agreement, except those which are gross in character, shall nolonger be treated as unfair labor practice and shall be resolved as grievances

under the Collective Bargaining Agreement. For purposes of this article,

gross violations of Collective Bargaining Agreement shall mean flagrantand/or malicious refusal to comply with the economic provisions of such

agreement. x x x.” (Underscoring supplied)

“ART. 262. Jurisdiction over other labor disputes. - The VoluntaryArbitrator or panel of Voluntary Arbitrators, upon agreement of the parties,shall also hear and decide all other labor disputes including unfair labor

practices and bargaining deadlocks.”

With the amendments introduced by RA 6715, it can be gleanedthat the Labor Arbiter still retains jurisdiction over ULP cases. Thereis, however, a significant change: The unqualified jurisdictionconferred upon the Labor Arbiter prior to the amendment by RA 6715has been narrowed down so that ―violations of a Collective

Bargaining Agreement, except those which are gross incharacter, shall no longer be treated as unfair labor practice but asgrievances under the Collective Bargaining Agreement. It is further stated that ―gross violations of Collective Bargaining Agreement shallmean flagrant and/or malicious refusal to comply with the economicprovisions of such agreement.‖ Hence, for a ULP case to becognizable by the Labor Arbiter, and the NLRC to exercise itsappellate jurisdiction, the allegations in the complaint shouldshow prima facie the concurrence of two things, namely: (1) gross

violation of the CBA; AND (2) the violation pertains to the economicprovisions of the CBA.

In several instances prior to the instant case, the Court alreadymade its pronouncement that RA 6715 is in the nature of a curativestatute. As such, we declared that it can be applied retroactively topending cases. Thus, in Briad Agro Development Corporation v. DelaCerna,[13] we held:

“Republic Act No. 6715, like its predecessors, Executive Order No. 111 andArticle 217, as amended, has retroactive application. Thus, when this new

law divested Regional Directors of the power to hear money claims, the







divestment affected pending litigations. It also affected this particular case. (Note that under par. 6, where the claim does not exceed P5,000.00,

regional directors have jurisdiction).

In Garcia v. Martinez , we categorically held that amendments relative to the

jurisdiction of labor arbiters (under Presidential Decree No. 1367, divestingthe labor arbiter of jurisdiction) partake of the nature of curative statutes,

thus:

It now appears that at the time this case was decided the lower court had jurisdiction over Velasco‟s complaint although at the time it was filed said

court was not clothed with such jurisdiction. The lack of jurisdiction was

cured by the issuance of the amendatory decree which is in the nature of acurative statute with retrospective application to a pending proceeding, like

Civil Case No. 9657 (See 82 C.J.S. 1004).

Garcia has since been uniformly applied in subsequent cases. Thus,

in Calderon v. Court of Appeals, reiterated that „PD No. 1367 [is] curativeand retrospective in nature.

The Decision of this case, finally, acknowledged the retrospective

characteristics of Executive Order No. 111. x x x.”

With the Briad ruling in place, the implication is that the

qualified jurisdiction of the Labor Arbiter and the NLRC should havebeen applied when the ULP complaint was still pending. This meansthat petitioners should have been required to show in their complaintthe gross nature of the CBA violation, as well as the economicprovision violated, without which the complaint would bedismissible. Herein lies the problem. The Court‘s appreciation of petitioners‘ cause of action is that, while it would make out a case for ULP, under present law, however, the same falls short of the specialrequirements necessary to make it cognizable by the Labor Arbiter and the NLRC. Unsubstantiated conclusions of bad faithand unjustified refusal to re-employ petitioners, to our mind, do notconstitute gross violation of the CBA for purposes of lodging jurisdiction with the Labor Arbiter and the NLRC. Althoughevidentiary matters are not required (and even discouraged) to bealleged in a complaint, still, sufficient details supportingthe conclusion of bad faith and unjust refusal to re-employ petitionersmust be indicated. Furthermore, it is even doubtful if the CBAprovision on re-employment fits into the accepted notion of aneconomic provision of the CBA. Thus, given the foregoing

considerations, may the Briad doctrine be applied to the instant case



and cause its dismissal for want of jurisdiction of the Labor Arbiter and the NLRC?

Upon a careful and meticulous study of Briad, the Court holdsthat the rationale behind it does not apply to the present case. We

adopt instead the more recent case ofErectors, Inc. v. National Labor Relations Commission,[14] where we refused to give retroactiveapplication to Executive Order No. 797 which created the PhilippineOverseas Employment Administration (POEA). Under said law,POEA was vested with ―original and exclusive jurisdiction over allcases, including money claims, involving employer-employeerelations arising out of or by virtue of any law or contract involvingFilipino workers for overseas employment,‖[15] which jurisdiction wasoriginally conferred upon the Labor Arbiter. As in the instant case,the Labor Arbiter‘s assumption of jurisdiction therein was likewisequestioned in view of the subsequent enactment of E.O. 797. Inruling against the retroactive application of the law, the Courtexplained its position as follows:

“The rule is that jurisdiction over the subject matter is determined by the law

in force at the time of the commencement of the action. On March 31,

1982, at the time private respondent filed his complaint against the petitioner, the prevailing laws were Presidential Decree No. 1691 and

Presidential Decree No. 1391 which vested the Regional Offices of the

Ministry of Labor and the Labor Arbiters with „original and exclusive jurisdiction over all cases involving employer-employee relations including

money claims arising out of any law or contracts involving Filipino workers

for overseas employment.‟ At the time of the filing of the complaint, theLabor Arbiter had clear jurisdiction over the same.

E.O. No. 797 did not divest the Labor Arbiter‟s authority to hear and decide

the case filed by private respondent prior to its effectivity. Laws should

only be applied prospectively unless the legislative intent to give themretroactive effect is expressly declared or is necessarily implied from the

language used. We fail to perceive in the language of E.O. No. 797 anintention to give it retroactive effect.

The case of Briad Agro Development Corp. vs. Dela Cerna cited by the petitioner is not applicable to the case at bar. In Briad , the Court applied the

exception rather than the general rule. In this case, Briad Agro

Development Corp. and L.M. Camus Engineering Corp. challenged the jurisdiction of the Regional Director of the Department of Labor and

Employment over cases involving workers‟ money claims, since Article217 of the Labor Code, the law in force at the time of the filing of the

complaint, vested in the Labor Arbiters exclusive jurisdiction over such











cases. The Court dismissed the petition in its Decision dated June 29,1989. It ruled that the enactment of E.O. No. 111, amending Article 217 of

the Labor Code, cured the Regional Director‟s lack of jurisdiction by giv ing

the Labor Arbiter and the Regional Director concurrent jurisdiction over all

cases involving money claims. However, on November 9, 1989, the Court,in a Resolution, reconsidered and set aside its June 29 Decision and referred

the case to the Labor Arbiter for proper proceedings, in view of the

promulgation of Republic Act (R.A.) 6715 which divested the RegionalDirectors of the power to hear money claims. It bears emphasis that the

Court accorded E.O. No. 111 and R.A. 6715 a retroactive application

because as curative statutes, they fall under the exceptions to the rule on prospectivity of laws.

E.O. No. 111, amended Article 217 of the Labor Code to widen the

worker‟s access to the government for redress of grievances by giving theRegional Directors and Labor Arbiters concurrent jurisdiction over casesinvolving money claims. This amendment, however, created a situation

where the jurisdiction of the Regional Directors and the Labor Arbiters

overlapped. As a remedy, R.A. 6715 further amended Article 217 bydelineating their respective jurisdictions. Under R.A. 6715, the Regional

Director has exclusive original jurisdiction over cases involving money

claims provided: (1) the claim is presented by an employer or personemployed in domestic or household service, or househelper under the Code;

(2) the claimant, no longer being employed, does not seek reinstatement;

and (3) the aggregate money claim of the employee or househelper does notexceed P5,000.00. All other cases within the exclusive and original

jurisdiction of the Labor Arbiter. E.O. No. 111 and R.A. 6715 are therefore

curative statutes. A curative statute is enacted to cure defects in a prior lawor to validate legal proceedings, instruments or acts of public authorities

which would otherwise be void for want of conformity with certain existing

legal requirements.

The law at bar, E.O. No. 797, is not a curative statute. x x

x.‖ We do not find any reason why the Court should not apply the

above ruling to the case at bar, notwithstanding the fact that adifferent law is involved. Actually, this is not the first time that theCourt refused to apply RA 6715 retroactively.[16] Our previousdecisions on whether to give it retroactive application or notdepended to a great extent on what amended provisions were under consideration, as well as the factual circumstances to which theywere made to apply. In Briad, the underlying reason for applying RA

6715 retroactively was the fact that prior to its amendment, Article217 of the Labor Code, as amended by then Executive Order No.







111, created a scenario where the Labor Arbiters and the RegionalDirectors of the Department of Labor and Employment (DOLE) hadoverlapping jurisdiction over money claims. This situation wasviewed as a defect in the law so that when RA No. 6715 was passed

and delineated the jurisdiction of the Labor Arbiters and RegionalDirectors, the Court deemed it a rectification of such defect; hence,the conclusion that it was curative in nature and, therefore, must beapplied retroactively.

The same thing cannot be said of the case at bar. Likein Erectors, the instant case presents no defect in the law requiring aremedy insofar as the jurisdiction of the Labor Arbiter and theVoluntary Arbitrator is concerned. There is here no overlapping of

jurisdiction to speak of because matters involving interpretation andimplementation of CBA provisions, as well as interpretation andenforcement of company personnel policies, have always beendetermined by the Voluntary Arbitrator even prior to RA6715. Similarly, all ULP cases were exclusively within the jurisdictionof the Labor Arbiter. What RA 6715 merely did was to re-apportionthe jurisdiction over ULP cases by conferring exclusive jurisdictionover such ULP cases that do not involve gross violation of a CBA‘seconomic provision upon the voluntary arbitrator. We do not seeanything in the act of re-apportioning jurisdiction curative of anydefect in the law as it stood prior to the enactment of RA 6715. The

Court view it as merely a matter of change in policy of the lawmakers,especially since the 1987 Constitution adheres to the preferential useof voluntary modes of dispute settlement.[17] This, instead of theinherent defect in the law, must be the rationale that prompted theamendment. Hence, we uphold the jurisdiction of the Labor Arbiter which attached to this case at the time of its filing on December 5,1988.

Finally, the contention that it was Atty. Gutierrez who exclusivelyrepresented Philtread and that the law firm of Borreta, Gutierrez and

Leogardo had been dissolved, are lame excuses to cast doubt on thepropriety of service to Atty. Borreta. It must be noted that thecomplaint of petitioners was filed on December 5, 1988. Presumably,the preliminary conferences adverted to by Atty. Borreta, where Atty.Gutierrez supposedly declared that he was exclusively representingPhiltread, transpired at around that date. The Court, however, issurprised to discover that the record bears a Notice of Change of

Address dated March 12, 1990, filed by Atty. Gutierrez, indicatingtherein that the counsel for respondent (Philtread) was ―Borreta,Gutierrez and Leogardo‖ whose address could be found at the ―3rd

Floor, Commodore Condominium Arquiza corner M. GuerreroStreets, Ermita, Manila.‖ If, indeed, Atty. Gutierrez declared during







the Labor Arbiter‘s proceedings that he was exclusively representingPhiltread, why then did he use the firm‘s name, and its new addressat that, in the aforementioned notice to the NLRC? Moreover, whydid Atty. Borreta take fifteen days to file his Manifestation and inform

the NLRC of the ―improper‖ service of the resolution to him? Why didhe not object immediately to the service by the bailiff? Consideringthat Atty. Gutierrez and Atty. Borreta were once partners in their lawfirm, it behooves Atty. Borreta to have at least advised his former partner of the receipt of the resolution. As a lawyer, his receipt of the adverse resolution should have alerted him of the adverseconsequences which might follow if the same were not acted uponpromptly, as what in fact happened here. As for Atty. Gutierrez, if thelaw firm of Borreta, Gutierrez, and Leogardo were really dissolved, itwas incumbent upon him not to have used the firm‘s name in the first

place, or he should have withdrawn the appearance of the firm andentered his own appearance, in case the dissolution took placemidstream. By failing to exercise either option, Atty. Gutierrez cannotnow blame the NLRC for serving its resolution at the address of thefirm still on record.[18] To our mind, these excuses cannotcamouflage the clever ploy of Philtread‘s counsel to earn a lastchance to move for reconsideration. This Court, it bearsemphasizing, is not impressed, but looks incredulously at suchsuperficial moves.

WHEREFORE, the instant petition is hereby GRANTED. Theassailed resolutions of the NLRC dated November 18, 1992, and

April 7, 1993, are SET ASIDE, while its resolution dated April 15,1992, is REINSTATED for immediate execution.

SO ORDERED.

G.R. No. 154830 June 8, 2007

PIONEER CONCRETE PHILIPPINES, INC., PIONEER PHILIPPINES HOLDINGS, andPHILIP J. KLEPZIG,petitioners,vs.ANTONIO D. TODARO, respondent.

D E C I S I O N

AUSTRIA-MARTINEZ, J .:

Before the Court is a Petition for Review on Certiorari seeking to annul and set aside theDecision1 of the Court of Appeals (CA) dated October 31, 2000 in CA-G.R. SP No. 54155and its Resolution2 of August 21, 2002 denying petitioners‘ Motion for Reconsideration.

The factual and procedural antecedents of the case are as follows:




http://www.lawphil.net/judjuris/juri2007/jun2007/gr_154830_2007.html#fnt1









On January 16, 1998, herein respondent Antonio D. Todaro (Todaro) filed with theRegional Trial Court (RTC) of Makati City, a complaint for Sum of Money and Damageswith Preliminary Attachment against Pioneer International Limited (PIL), Pioneer Concrete Philippines, Inc. (PCPI), Pioneer Philippines Holdings, Inc. (PPHI), John G.McDonald (McDonald) and Philip J. Klepzig (Klepzig).3

In his complaint, Todaro alleged that PIL is a corporation duly organized and existingunder the laws of Australia and is principally engaged in the ready-mix concrete andconcrete aggregates business; PPHI is the company established by PIL to own and holdthe stocks of its operating company in the Philippines; PCPI is the company establishedby PIL to undertake its business of ready-mix concrete, concrete aggregates andquarrying operations in the Philippines; McDonald is the Chief Executive of the Hongkongoffice of PIL; and, Klepzig is the President and Managing Director of PPHI and PCPI;Todaro has been the managing director of Betonval Readyconcrete, Inc. (Betonval), acompany engaged in pre-mixed concrete and concrete aggregate production; heresigned from Betonval in February 1996; in May 1996, PIL contacted Todaro and askedhim if he was available to join them in connection with their intention to establish a ready-mix concrete plant and other related operations in the Philippines; Todaro informed PIL of

his availability and interest to join them; subsequently, PIL and Todaro came to anagreement wherein the former consented to engage the services of the latter as aconsultant for two to three months, after which, he would be employed as the manager of PIL's ready-mix concrete operations should the company decide to invest in thePhilippines; subsequently, PIL started its operations in the Philippines; however, itrefused to comply with its undertaking to employ Todaro on a permanent basis.4

Instead of filing an Answer, PPHI, PCPI and Klepzig separately moved to dismiss thecomplaint on the grounds that the complaint states no cause of action, that the RTC hasno jurisdiction over the subject matter of the complaint, as the same is within the jurisdiction of the NLRC, and that the complaint should be dismissed on the basis of thedoctrine of forum non conveniens.5

In its Order dated January 4, 1999, the RTC of Makati, Branch 147, denied hereinpetitioners' respective motions to dismiss.6 Herein petitioners, as defendants, filed anUrgent Omnibus Motion7 for the reconsideration of the trial court's Order of January 4,1999 but the trial court denied it via its Order 8 dated June 3, 1999.

On August 3, 1999, herein petitioners filed a Petition for Certiorari with the CA.9 OnOctober 31, 2000, the CA rendered its presently assailed Decision denying hereinpetitioners' Petition for Certiorari . Petitioners filed a Motion for Reconsideration but theCA denied it in its Resolution dated August 21, 2002.

Hence, herein Petition for Review on Certiorari based on the following assignment of

errors:

A.

THE COURT OF APPEALS' CONCLUSION THAT THE COMPLAINT STATES ACAUSE OF ACTION AGAINST PETITIONERS IS WITHOUT ANY LEGALBASIS. THE ANNEXES TO THE COMPLAINT CLEARLY BELIE THE ALLEGATION OF EXISTENCE OF AN EMPLOYMENT CONTRACT BETWEENPRIVATE RESPONDENT AND PETITIONERS.

B.

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN AWAY NOT IN ACCORD WITH LAW AND WITH APPLICABLE DECISIONS OF































THE SUPREME COURT WHEN IT UPHELD THE JURISDICTION OF THETRIAL COURT DESPITE THE FACT THAT THE COMPLAINT INDUBITABLYSHOWS THAT IT IS AN ACTION FOR AN ALLEGED BREACH OFEMPLOYMENT CONTRACT, AND HENCE, FALLS WITHIN THE EXLCUSIVEJURISDICTION OF THE NATIONAL LABOR RELATIONS COMMISSION.

C

THE COURT OF APPEALS DISREGARDED AND FAILED TO CONSIDER THEPRINCIPLE OF "FORUM NON CONVENIENS" AS A VALID GROUND FORDISMISSING A COMPLAINT.10

In their first assigned error, petitioners contend that there was no perfected employmentcontract between PIL and herein respondent. Petitioners assert that the annexes torespondent's complaint show that PIL's offer was for respondent to be employed as themanager only of its pre-mixed concrete operations and not as the company's managingdirector or CEO. Petitioners argue that when respondent reiterated his intention tobecome the manager of PIL's overall business venture in the Philippines, he, in effect didnot accept PIL's offer of employment and instead made a counter-offer, which, however,was not accepted by PIL. Petitioners also contend that under Article 1318 of the CivilCode, one of the requisites for a contract to be perfected is the consent of the contractingparties; that under Article 1319 of the same Code, consent is manifested by the meetingof the offer and the acceptance upon the thing and the cause which are to constitute thecontract; that the offer must be certain and the acceptance absolute; that a qualifiedacceptance constitutes a counter-offer. Petitioners assert that since PIL did not acceptrespondent's counter-offer, there never was any employment contract that was perfectedbetween them.

Petitioners further argue that respondent's claim for damages based on the provisions of Articles 19 and 21 of the Civil Code is baseless because it was shown that there was no

perfected employment contract.

Assuming, for the sake of argument, that PIL may be held liable for breach of employment contract, petitioners contend that PCPI and PPHI, may not also be heldliable because they are juridical entities with personalities which are separate and distinctfrom PIL, even if they are subsidiary corporations of the latter. Petitioners also aver thatthe annexes to respondent's complaint show that the negotiations on the allegedemployment contract took place between respondent and PIL through its office inHongkong. In other words, PCPI and PPHI were not privy to the negotiations betweenPIL and respondent for the possible employment of the latter; and under Article 1311 of the Civil Code, a contract is not binding upon and cannot be enforced against one whowas not a party to it even if he be aware of such contract and has acted with knowledge

thereof.

Petitioners further assert that petitioner Klepzig may not be held liable because he issimply acting in his capacity as president of PCPI and PPHI and settled is the rule that anofficer of a corporation is not personally liable for acts done in the performance of hisduties and within the bounds of the authority conferred on him. Furthermore, petitionersargue that even if PCPI and PPHI are held liable, respondent still has no cause of actionagainst Klepzig because PCPI and PPHI have personalities which are separate anddistinct from those acting in their behalf, such as Klepzig.

As to their second assigned error, petitioners contend that since herein respondent'sclaims for actual, moral and exemplary damages are solely premised on the alleged

breach of employment contract, the present case should be considered as falling withinthe exclusive jurisdiction of the NLRC.











With respect to the applicability of the principle of forum non conveniens in the presentcase, this Court's ruling inBank of America NT & SA v. Court of Appeal s21 is instructive, towit:

The doctrine of forum non conveniens, literally meaning ‗the forum isinconvenient‘, emerged in private international law to deter the practice of globalforum shopping, that is to prevent non-resident litigants from choosing the forumor place wherein to bring their suit for malicious reasons, such as to secureprocedural advantages, to annoy and harass the defendant, to avoidovercrowded dockets, or to select a more friendly venue. Under this doctrine, acourt, in conflicts of law cases, may refuse impositions on its jurisdiction where itis not the most "convenient" or available forum and the parties are not precludedfrom seeking remedies elsewhere.

Whether a suit should be entertained or dismissed on the basis of said doctrinedepends largely upon the facts of the particular case and is addressed to thesound discretion of the trial court. In the case of Communication Materials and Design, Inc. vs. Court of Appeals, this Court held that "xxx [a] Philippine Court

may assume jurisdiction over the case if it chooses to do so; provided, that thefollowing requisites are met: (1) that the Philippine Court is one to which theparties may conveniently resort to; (2) that the Philippine Court is in a position tomake an intelligent decision as to the law and the facts; and, (3) that thePhilippine Court has or is likely to have power to enforce its decision."

Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court of Appeals, that the doctrine of forum non conveniens should not be used as aground for a motion to dismiss because Sec. 1, Rule 16 of the Rules of Court does not include said doctrine as a ground. This Court further ruledthat while it is within the discretion of the trial court to abstain fromassuming jurisdiction on this ground, it should do so only after vital facts

are established, to determine whether special circumstances require thecourt’s desistance; and that the propriety of dismissing a case based onthis principle of forum non conveniens requires a factual determination,hence it is more properly considered a matter of defense.22 (emphasissupplied)

In the present case, the factual circumstances cited by petitioners which would allegedly justify the application of the doctrine of forum non conveniens are matters of defense, themerits of which should properly be threshed out during trial.

WHEREFORE, the instant petition is DENIED and the assailed Decision and Resolutionof the Court of Appeals are AFFIRMED.

Costs against petitioners.

SO ORDERED.

G.R. No. 163768 March 27, 2007

JULIUS KAWACHI and GAYLE KAWACHI, Petitioners,vs.DOMINIE DEL QUERO and HON. JUDGE MANUEL R. TARO, Metropolitan TrialCourt, Branch 43, Quezon City, Respondents.











D E C I S I O N

TINGA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure,assailing two resolutions of the Regional Trial Court (RTC), Branch 226, Quezon Citywhich affirmed the jurisdiction of the Metropolitan Trial Court (MeTC), Branch 42, QuezonCity over private respondent‘s action for damages against petitioner.

The following factual antecedents are matters of record.1ªvvphi1.nét

In an Affidavit-Complaint dated 14 August 2002, private respondent Dominie Del Querocharged A/J Raymundo Pawnshop, Inc., Virgilio Kawachi and petitioner Julius Kawachiwith illegal dismissal, non-execution of a contract of employment, violation of theminimum wage law, and non-payment of overtime pay. The complaint was filed beforethe National Labor Relations Commission (NLRC).1

The complaint essentially alleged that Virgilio Kawachi hired private respondent as aclerk of the pawnshop and that on certain occasions, she worked beyond the regular working hours but was not paid the corresponding overtime pay.

The complaint also narrated an incident on 10 August 2002, wherein petitioner JuliusKawachi scolded private respondent in front of many people about the way she treatedthe customers of the pawnshop and afterwards terminated private respondent‘semployment without affording her due process.

On 7 November 2002, private respondent Dominie Del Quero filed an action for damagesagainst petitioners Julius Kawachi and Gayle Kawachi before the MeTC of QuezonCity.2 The complaint, which was docketed as Civil Case No. 29522, alleged the following:

2. That the Plaintiff was employed as a clerk in the pawnshop business office of the Defendants otherwise known as the A/J RAYMUNDO PAWNSHOP, INC.located (sic) and with principal office address at Unit A Virka Bldg. Edsa Corner Roosevelt[,] Quezon City, from May 27, 2002 to August 10, 2002;

3. That on August 10, 2002 at or about 11:30 AM, the Plaintiff was admonishedby the Defendants Julius Kawachi and Gayle Kawachi who are acting asmanager and assistant manager respectively of the pawnshop business andalternately accused her of having committed an act which she had not done andwas scolded in a loud voice in front of many employees and customers in their offices;

4. That further for no apparent reason the Plaintiff was ordered to get out andleave the pawnshop office and was told to wait for her salary outside the officewhen she tried to explain that she had no fault in the complaint of the customer,(sic) [H]owever[,] her explanation fell on deaf ears;

5. That she was instantly dismissed from her job without due process;

6. That the incident happened in front of many people which caused the Plaintiff to suffer serious embarrassment and shame so that she could not do anythingbut cry because of the shameless way by which she was terminated from theservice; x x x3

http://www.lawphil.net/judjuris/juri2007/mar2007/gr_163768_2007.html#fnt1














The complaint for damages specifically sought the recovery of moral damages,exemplary damages and attorney‘s fees.

Petitioners moved for the dismissal of the complaint on the grounds of lack of jurisdictionand forum-shopping or splitting causes of action. At first, the MeTC granted petitioners‘motion and ordered the dismissal of the complaint for lack of jurisdiction in an Order dated 2 January 2003.4 Upon private respondent‘s motion, the MeTC reconsidered andset aside the order of dismissal in an Order dated 3 March 2003.5 It ruled that no causalconnection appeared between private respondent‘s cause of action and the employer-employee relations between the parties. The MeTC also rejected petitioners‘ motion for reconsideration in an Order dated 22 April 2003.6

Thus, petitioners elevated the MeTC‘s aforesaid two orders to the RTC, Branch 226 of Quezon City, via a Petition for Certiorari (With Prayer for Temporary Restraining Order and/or Preliminary Injunction). After due hearing, the RTC declined petitioners‘ prayer for a temporary restraining order. For her part, private respondent filed a Motion to DismissPetition.

On 20 October 2003, the RTC issued the assailed Resolution, upholding the jurisdictionof the MeTC over private respondent‘s complaint for damages.7

The RTC held that private respondent‘s action for damages was based on the allegedtortious acts committed by her employers and did not seek any relief under the Labor Code. The RTC cited the pronouncement in Medina, et al. v. Hon. Castro-Bartolome, etc., et al .8 where the Court held that the employee‘s action for damagesbased on the slanderous remarks uttered by the employer was within the regular courts‘ jurisdiction since the complaint did not allege any unfair labor practice on the part of theemployer.

On 29 March 2004, the RTC denied petitioners‘ motion for reconsideration.9 Hence, theinstant petition for review on certiorari, raising the sole issue of jurisdiction over privaterespondent‘s complaint for damages.

Petitioners argue that the NLRC has jurisdiction over the action for damages because thealleged injury is work-related. They also contend that private respondent should not beallowed to split her causes of action by filing the action for damages separately from thelabor case.

Private respondent maintains that there is no causal connection between her cause of action and the employer-employee relations of the parties.

The petition is meritorious.

The jurisdictional controversy of the sort presented in this case has long been settled bythis Court.

Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employer-employee relations —in other words, the Labor Arbiter has jurisdiction to award not onlythe reliefs provided by labor laws, but also damages governed by the Civil Code.10

In the 1999 case of San Miguel Corporation v. Etcuban,11 the Court noted what was thenthe current trend, and still is, to refer worker-employer controversies to labor courts,

unless unmistakably provided by the law to be otherwise. Because of the trend, the Courtnoted further, jurisprudence has developed the "reasonable causal connection rule."Under this rule, if there is a reasonable causal connection between the claim asserted





































illegally dismissed employee other than those specified by the Civil Code. Hence, the factthat the issue—of whether or not moral or other damages were suffered by an employeeand in the affirmative, the amount that should properly be awarded to him in thecircumstances—is determined under the provisions of the Civil Code and not the Labor Code, obviously was not meant to create a cause of action independent of that for illegaldismissal and thus place the matter beyond the Labor Arbiter‘s jurisdiction.16

In the instant case, the allegations in private respondent‘s complaint for damages showthat her injury was the offshoot of petitioners‘ immediate harsh reaction as her administrative superiors to the supposedly sloppy manner by which she had dischargedher duties.

Petitioners‘ reaction culminated in private respondent‘s dismissal from work in the verysame incident. The incident on 10 August 2002 alleged in the complaint for damageswas similarly narrated in private respondent‘s Affidavit-Complaint supporting her actionfor illegal dismissal before the NLRC. Clearly, the alleged injury is directly related to theemployer-employee relations of the parties.

Where the employer-employee relationship is merely incidental and the cause of actionproceeds from a different source of obligation, the Court has not hesitated to uphold the jurisdiction of the regular

courts. Where the damages claimed for were based on tort, malicious prosecution, or breach of contract, as when the claimant seeks to recover a debt from a former employeeor seeks liquidated damages in the enforcement of a prior employment contract,17 the jurisdiction of regular courts was upheld. The scenario that obtains in this case isobviously different. The allegations in private respondent‘s complaint unmistakably relateto the manner of her alleged illegal dismissal.

For a single cause of action, the dismissed employee cannot be allowed to sue in twoforums: one, before the labor arbiter for reinstatement and recovery of back wages or for separation pay, upon the theory that the dismissal was illegal; and two, before a court of justice for recovery of moral and other damages, upon the theory that the

manner of dismissal was unduly injurious or tortious. Suing in the manner described isknown as "splitting a cause of action," a practice engendering multiplicity of actions. It isconsidered procedurally unsound and obnoxious to the orderly administration of justice.18

In the instant case, the NLRC has jurisdiction over private respondent‘s complaint for illegal dismissal and damages arising therefrom. She cannot be allowed to file a separateor independent civil action for damages where the alleged injury has a reasonableconnection to her termination from employment. Consequently, the action for damagesfiled before the MeTC must be dismissed.

WHEREFORE, the petition for review on certiorari is GRANTED. The two Resolutionsdated 20 October 2003 and 29 March 2004 of the Regional Trial Court, Branch 226,Quezon City are REVERSED and SET ASIDE. Costs against private respondent.

SO ORDERED.













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