Labor Relations - Jurisdiction and Procedure (Consolidated Case Digest)

Labor Relations - Jurisdiction and Procedure (Consolidated Case Digest)
Uy v Bueno
2
Peoples Boradcasting v. Secretary
Abad
Case title Peoples Broadcasting Association v. Sec. of Labor & Emp. (power to determine existence of E-ER)
GR number 179652
Date 6 March 2012
Ponente - VELASCO, JR., J
Facts - Private respondent Jandeleon Juezan filed a complaint against petitioner with the DOLE - Cebu City, for
illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day
and illegal diminution of benefits, delayed payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth.
After the conduct of summary investigations, and after the parties submitted their position papers, the DOLE
Regional Director found that private respondent was an employee of petitioner, and was entitled to his money
claims.
This case stemmed from the first decision of the court where it was held that while the DOLE may make a
determination of the existence of an employer-employee relationship, this function could not be co-extensive with
the visitorial and enforcement power provided in Art. 128(b) of the Labor Code, as amended by RA 7730. The
NLRC was held to be the primary agency in determining the existence of an employer-employee relationship. This
was the interpretation of the Court of the clause in cases where the relationship of employer-employee still exists
in
Art.
128(b)
From this Decision, the Public Attorneys Office (PAO) filed a Motion for Clarification of Decision (with Leave of
Court). The PAO sought to clarify as to when the visitorial and enforcement power of the DOLE be not considered
as co-extensive with the power to determine the existence of an employer-employee relationship.
Issue - may the DOLE make a determination of whether or not an employer-employee relationship exists, and if so,
to what extent?
Ruling If a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor
Code or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee
relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no
employer-employee relationship, the jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE,
and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art.
217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those
cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied
by a claim for reinstatement. If a complaint is filed with the NLRC, and there is still an existing employer-employee
relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules of Court.
In the exercise of the DOLEs visitorial and enforcement power, the Labor Secretary or the latters authorized
representative shall have the power to determine the existence of an employer-employee relationship, to the
exclusion of the NLRC.
3
Bernarte v. PBA
Abella
Bernarte v. PBA
G.R. No. 192084, September 14, 2011
Carpio, J.
Facts: Jose Mel Bernarte and Renato Guevarra were made to sign contracts on a year-to-year basis as PBA referees.
However, changes were made during the term of Commissioner Eala. Bernarte was only made to sign a one and a
half month during the second conference of the Filipino Cup. Later on, Bernarte was advised that his contract will
not be renewed due to his unsatisfactory performance on and off court. Bernarte cannot believe it for he was
awarded as Referee of the Year in 2003. He felt that his dismissal was due to his refusal to fix a game upon order of
one
of
the
officials.
On the other hand, Guevarra started as a trainee. Eventually, he was made to sign as a regular referee. However, he
was no longer made to sign a contract due to his questioning on the assignment of referees in out-of-town games.
Respondents contend that complainants were not illegally dismissed because they were not employees of the PBA.
They have entered a retainer contract wherein PBA had the prerogative whether or not to renew the same. The
Labor Arbiter declared petitioners an employee of respondent and that the former were illegally dismissed. NLRC
affirmed the same. However, on appeal, CA found petitioner an independent contractor since respondent did not
exercise any form of control over the means and method by which petitioners performed his work as a basketball
referee.
1
The Arbiter's Compendium

Issue: Whether Bernarte is an employee of PBA.
Ruling: No. Bernarte, as a referee, is an independent contractor. To determine the existence of an employeremployee relationship, the four-fold test must be applied, to wit: (a) the selection and engagement of the employee;
(b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employee on the
means and methods by which the work is accomplished. The so-called control test is the most important indicator
of the presence or absence of an employer-employee relationship.
The SC agreed that referees exercise their own independent judgment, based on the rules of the game, as to when
and how a call or decision is to be made. The referees decide whether an infraction was committed, and the PBA
cannot overrule them once the decision is made on the playing court. The referees are the only, absolute, and final
authority on the playing court. Respondents or any of the PBA officers cannot and do not determine which calls to
make or not to make and cannot control the referee when he blows the whistle because such authority exclusively
belongs to the referees. The very nature of petitioners job of officiating a professional basketball game undoubtedly
calls for freedom of control by respondents.
Moreover, the following circumstances indicate that petitioner is an independent contractor:
(1) the referees are required to report for work only when PBA games are scheduled, which is three times a week
spread over an average of only 105 playing days a year, and they officiate games at an average of two hours per
game; and (2) the only deductions from the fees received by the referees are withholding taxes.
In other words, unlike regular employees who ordinarily report for work eight hours per day for five days a week,
petitioner is required to report for work only when PBA games are scheduled or three times a week at two hours per
game. In addition, there are no deductions for contributions to the Social Security System, Philhealth or Pag-Ibig,
which are the usual deductions from employees salaries. These undisputed circumstances buttress the fact that
petitioner is an independent contractor, and not an employee of respondents.
4
Citibank v. CA
Borlas
G.R. No. 108961. November 27, 1998
CITIBANK, N. A., Petitioners, v. COURT OF APPEALS (Third Division), AND CITIBANK INTEGRATED GUARDS
LABOR
ALLIANCE
(CIGLA)
SEGATUPAS/FSM
LOCAL
CHAPTER
No.
1394,
Respondents.
PARDO, J.:
Facts: Citibank, situated at 8741 Paseo de Roxas, Makati, Metro Manila, entered into a contract with El Toro
Security Agency, Inc. for security and protection service. The parties renewed the contract yearly until April 22,
1990. Citibank Integrated Guards Labor Alliance-SEGA-TUPAS/FSM (CIGLA), which includes el toro security
guards assigned to Citibank, filed with the National Conciliation and Mediation Board (NCMB) for preventive
mediation against Citibank due to unfair labor practice, dismissal of union officers/members and union busting.
Citibank notified El Toro that they will not renew their contract with them. CIGLA converted its request for
preventive mediation into a notice of strike for failure of the parties to reach a mutually acceptable settlement of the
issues and alleged as supplemental issue the mass dismissal of all union officers and members. El Toro security
guards formerly assigned to guard Citibank premises loitered around the bank's premises in large groups and
threatened to stage a strike, which would hamper its operations and the normal conduct of its business and that the
bank would suffer damages should a strike push through. Faced with the prospect of disruption of its business
operations, Citibank filed with RTC, Makati, a complaint for injunction and damages against CIGLA. CIGLA filed a
motion to dismiss that this court had no jurisdiction, this being labor dispute, which was dismissed. The court ruled
in favor of Citibank. CIGLA filed a writ of certiorari which was granted by CA. Hence this petition.
Issue: Whether there is a labor dispute between Citibank and the security guards, members of CIGLA?
Ruling: None. Labor dispute includes any controversy or matter concerning terms or conditions of employment or
the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms
and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer
and employee.
El Toro, being an independent contractor, recruited, hired and assigned the watchmen to their place of work. Thus,
no employer-employee relationship existed between Citibank and the security guard members of the union in the
security agency who were assigned to secure the bank's premises and property. Hence, there was no labor dispute
and no right to strike against the bank.
5
Montoya v. Escayo
Gubantes
Montoya vs Escayo
Labor Disputes not subject to Barangay conciliation
FACTS:
Respondents were formerly employed as salesgirls in the petitioner's store. Their cases were initially filed
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separately but subsequently consolidated. The complaint was for the collection of sums of money against their
employer for alleged unpaid overtime, holiday pay and illegal dismissal among others. The employer moved to
dismiss the complaints claiming that the private respondents failed to refer the dispute to the Lupon Tagapayapa
for possible settlement and to secure the certification required from the Lupon Chairman prior to the filing of the
cases with the Labor Arbiter. The LA granted the motion to dismiss. NLRC reversed the LA order and remanded
the case to the LA. The employer filed a petition for certiorari contending that amicable settlement proceedings
before the LT as a jurisdictional requirement at the trial level apply to labor cases.
ISSUE: WON labor disputes are subject to Barangay Concilation.
RULING: No, the provisions of PD 1508 requiring the submission of disputes before the barangay Lupong
Tagapayapa prior to their filing with the court or other government offices are not applicable to labor cases. This
decree intended applicability only to courts of justice, and not to labor relations commissions or labor arbitratos'
offices. There is no mention at all of labor relations or controversies and labor arbiters or commissions in the
clauses involved. Art.226 of the LC expressly grants original and exclusive jurisdiction over the conciliation and
mediation of disputes, grievances, or problems in the original offices of the DOLE. Requiring conciliation of labor
disputes before the barangay courts would defeat the very salutary purposes of the law. Instead of simplifying labor
proceedings designed at expeditious settlement or referral to the proper court or office to decide it finally, the
position taken by the petitioner would only duplicate the conciliation proceedings and unduly delay the disposition
of the labor case.
6
Smart
Jimenez
SMART Communications v. Astorga
GR No. 181393, July 28, 2009 Employee benefit: a labor dipute or a civil dispute (Car Loan)
Facts:
Regina M. Astorga (Astorga) was employed by respondent Smart Communications, Incorporated (SMART) on May
8, 1997 as District Sales Manager of the Corporate Sales Marketing Group/ Fixed Services Division
(CSMG/FSD).As District Sales Manager, Astorga enjoyed additional benefits, namely, annual performance
incentive equivalent to 30% of her annual gross salary, a group life and hospitalization insurance coverage, and a
car
plan
in
the
amount
of
P455,000.00.
SMART launched an organizational realignment to achieve more efficient operations. This was made known to the
employees on February 27, 1998.Part of the reorganization was the outsourcing of the marketing and sales force.
Thus, SMART entered into a joint venture agreement with NTT of Japan, and formed SMART-NTT Multimedia,
Incorporated (SNMI). Since SNMI was formed to do the sales and marketing work, SMART abolished the
CSMG/FSD, Astorgas division. SNMI absorbed some CSMG personnel who would be recommeded by SMART.
Astorga was not recommended but they offer her a supervisory position in the Customer Care Center. Astorga
refused the offer and despite the abolition of her division, she continued reporting for work. SMART issued a
memorandum advising Astorga of the termination of her employment on the ground of redundancy.
The termination of her employment prompted Astorga to file a Complaint8 for illegal dismissal, non-payment of
salaries and other benefits. SMART responded that there was valid termination.and argued that Astorga was
dismissed by reason of redundancy, which is an authorized cause for termination of employment, and the dismissal
was effected in accordance with the requirements of the Labor Code. The redundancy of Astorgas position was the
result of the abolition of CSMG and the creation of a specialized and more technically equipped SNMI, which is a
valid and legitimate exercise of management prerogative.
SMART sent a letter to Astorga demanding to pay the current market value of the Honda Civic Sedan which was
given to her under the companys car plan program, or to surrender the same to the company for proper
disposition. Astorga, however, failed and refused to do either, thus prompting SMART to file a suit for replevin with
the Regional Trial Court of Makati.
Astorga moved to dismiss the complaint on grounds of (i) lack of jurisdiction; (ii) failure to state a cause of action;
(iii) litis pendentia; and (iv) forum-shopping. 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 RTC has jurisdiction over the case
Ruling:
Yes. Contrary to the CAs rationication, te RTC rightfully assumed jurisdiction over the suit and acted well within its
discretion in denying Astorgas motion to dismiss. SMARTs demand for payment of the market value of the car or,
in the alternative, the surrrender of the car, is not a labor but a civil dispute. A dispute which involves the
relationship of debtor and creditor rather thar employer-employee relations falls within the jurisdiction of the
regular court.
7
Granteq Industrial
Jurado
3

Grandteq Industrial Steel Products V. Margallo
GR 181393. July 28,09
Ponente: Chico Nazario
Fatcs. Grandteq is a domestic corporation engaged in the business of selling welding electrodes. Margallo was
employed as a sales engineer. Margallo, awarded as salesman of the year, she was rewarded a car loan program in
which she availed the same. Unfortunately, She was allegedly had committed a company violation in which she was
asked to resign with a promise that her car loan payments will be reimbursed.
No reimbursement had transpired. Margallo filed a complaint before the Labor Arbiter for the recovery of car loan
payments. However, Grandteq contended that based in their car loan agreement, that in the event that
Margallomre
signed
or
was
terminated
her
car
loan
would
be
forfeited.
Issue. Whether the contetion of Grantdteq is valid?
Held.
No. The Court uphold a car loan agreement that threatens an employee with the forfeiture of all the car
loan payments, should the employee wish to resign, said agreement can then be used by the employer to either hold
said employee hostage to the job or punish him from resigning.
8
Francisco
Otsuka
9
Sonza
Sonza v. ABS-CBN
GR.no. 138051 June 10, 2004
Carpio,J.:
Piedad
Facts: ABS-CBN and Sonza signed an agreement, Sonza being the representative of MJMDC as talent for radio and
television. They were paid agreed talent fees. Later, Sonza resigned and ABS- CBN called for the rescission of the
contract. In this contract, Sonza renounced the recovery of the benefits. But Sonza filed a complaint thereafter for
non- payment of his salaries and other benefits. Respondent cintended that there was no benefits as there are no
employer- employee relationship to speak with. The Labor Arbiter denied Sonzas motion and and was seconded by
the
Court
of
Appeals.
Issue: Whether or not Sonza is entitled to the benefits he is asking.
Ruling: No. The entitlement of benefits is a question relating to employer- employee relationship. In this case,
Petitioner failed to prove its existence.
Sonza is an independent contracto. His unique skills, talent and celebrity status are not possessed by ordinary
employees. He is not bound by the ABS-CBNs control in the conduct of his work. He is paid talent fees and not
wages for ordinary employees. Whatever benefits that the omplainant enjoyed roe from specific agreements of the
parties and not by any reason of employer- employee relationship.
10
Fairley
Rigor
FULACHE VS. ABS-CBN BROADCASTING CORP
GR NO. 183810 JANUARY 21, 2010
BRION, J.
FACTS:
Regularization Case
Petitioners Fulache and Castillo (drivers and cameramen), Atinen, Lagunzad, Jabonero (drivers), Ponce and
Almendras (cameramen/editors), Bigno (PA/Teleprompter) and Cabas (VTR man/editor) filed complaints for
regularization, unfair labor practice, and several money claims against ABS. They alleged that ABSCBN and their
union entered into a CBA, and they learned that they had been excluded from its coverage as ABS-CBN considered
them temporary employees. They claimed they had already rendered more than a year of service in the company
and, therefore, should have been recognized as regular employees entitled to security of tenure and to the privileges
and benefits enjoyed by regular employees.To properly establish their side, ABS-CBN argue otherwise.To cope with
fluctuating business conditions, it contracts on a case-to-case basis the services of persons, also called talents
(considered independent contractors) who possess the necessary qualifications to meet the requirements of its
programs. These talents are paid a pre-arranged talent fee. They do not undergo probation and their services are
terminated at the completion of the program. ABSCBN alleged that the complainants in this case are off-camera
talents, hence not entitled to regularization.
LA ruling ONE petitioners are regular employees.
Illegal Dismissal Case
4

During its appeal to NLRC, ABSCBN terminated the services of the drivers (Note only five of the above: Fulache,
Jabonero, Castillo, Lagunzad and Atinen [Atinen will execute a quitclaim later]).Hence, they filed a complaint for
illegal dismissal case (Note: The same Labor Arbiter above [LA Rendoque] handled this case). ABSCBNs Defense.
Before all these cases started, it had already undertaken a comprehensive review of its existing organizational
structure to address its operational requirements. Some services, such driving services, belongs to a job category
that had already been contracted out.
LA Ruling TWO contracting out of ABS CBN is valid. No illegal dismissal of petitioners due to redundancy, an
authorized cause.
Merger of cases
NLRCs Joint Decision
Regularization Case - EER exists between ABS CBN and petitioners. They cannot be considered contractual
employees since they were not paid for the result of their work, but on a monthly basis and were required to do
their work in accordance with the companys schedule.Granted CBA benefits.
Illegal Dismissal Case Drivers are illegally dismissed.
NLRCs Reconsideration EER exists, BUT there is redundancy so no illegal dismissal! They are also denied CBA
benefits and that they are not deemed part of the collective bargaining unit!
CAs Ruling
Petitioners failed to prove their claim to CBA benefits since they never raised the issue in the compulsory
arbitration proceedings, and did not appeal the labor arbiters decision which was silent on their entitlement to
CBA benefits. No illegal dismissal redundancy! No showing of abuse of prerogative on the part of ABS CBN!
Hence, this petition.
ISSUE:
Whether or not the petitioners are regular employees?
Whether or not the drivers are illegally dismissed?
RULING:
YES.
Claim for CBA Benefits being regular employees.
As regular employees, the petitioners fall within the coverage of the bargaining unit and are therefore entitled to
CBA
benefits
as
a
matter
of
law
and
contract.
The ruling of the Labor Arbiter unequivocally settled the petitioners employment status: they are ABS-CBNs
regular employees entitled to the benefits and privileges of regular employees. These benefits and privileges arise
from entitlements under the law and from their employment contract as regular ABS-CBN employees, part of
which
is
the
CBA
if
they
fall
within
the
coverage
of
this
agreement.
Thus, what only needs to be resolved as an issue for purposes of implementation of the decision is whether the
petitioners fall within CBA coverage.The inclusion or exclusion of new job classifications into the bargaining unit
shall
be
subject
of
discussion
between
the
COMPANY
and
the
UNION.
Under these terms, the petitioners are members of the appropriate bargaining unit because they are regular rankand-file employees and do not belong to any of the excluded categories. Specifically, nothing in the records shows
that they are supervisory or confidential employees; neither are they casual nor probationary employees.
CBA coverage is not only a question of fact, but of law and contract. The factual issue is whether the petitioners are
regular rank-and-file employees of ABS-CBN. The tribunals below uniformly answered this question in the
affirmative.
YES.
Illegal Dismissal Case
The termination of employment of the four drivers occurred under highly questionable circumstances and with
plain and unadulterated bad faith
.
The regularization case was in fact the root of the resulting bad faith as this case gave rise and led to the dismissal
5

case. In the course of this appeal, ABS-CBN took matters into its own hands and terminated the petitioners
services, clearly disregarding its own appeal then pending with the NLRC. To justify the termination of service, the
company cited redundancy as its authorized cause but offered no justificatory supporting evidence. It merely
claimed that it was contracting out the petitioners activities in the exercise of its management prerogative. This
move (dismissed while there is a pending case) is a direct affront to the authority of the NLRC and an abuse of the
appeal process)
It also forgot that by claiming redundancy, they admitted that petitioners are regular employees.
ABS-CBN forgot that it had an existing CBA with a union, which agreement must be respected in any move
affecting the security of tenure of affected employees; otherwise, it ran the risk of committing unfair labor practice
both a criminal and an administrative offense.
DAGDAG LANG BAKA TANUNGIN KC, AYUS LANG.. JJJ
The errors and omissions do not belong to ABS-CBN alone. The labor arbiter himself who handled both cases did
not see the totality of the companys actions for what they were. He appeared to have blindly allowed what he
granted the petitioners with his left hand, to be taken away with his right hand, unmindful that the company
already exhibited a badge of bad faith in seeking to terminate the services of the petitioners whose regular status
had just been recognized. He should have recognized the bad faith from the timing alone of ABS-CBNs conscious
and purposeful moves to secure the ultimate aim of avoiding the regularization of its so-called "talents."
The NLRC, for its part, initially recognized the presence of bad faith. However, in an inexplicable turnaround, it
reconsidered its joint decision and reinstated not only the labor arbiters decision of January 17, 2002 in the
regularization case, but also his illegal dismissal decision of April 21, 2003.38 Thus, the NLRC joined the labor
arbiter in his error that we cannot but characterize as grave abuse of discretion.
The Court cannot leave unchecked the labor tribunals patent grave abuse of discretion that resulted, without
doubt, in a grave injustice to the petitioners who were claiming regular employment status and were
unceremoniously deprived of their employment soon after their regular status was recognized. Unfortunately, the
CA failed to detect the labor tribunals gross errors in the disposition of the dismissal issue. Thus, the CA itself
joined the same errors the labor tribunals committed.
11
Javier
Valera
JAVIER V FLY ACE
FACTS:
Javier files a complaint before the NLRC for underpayment of salaries and other labor standard benefits. He was an
employee of fly ace since Sept 2007 performing various tasks such as cleaning and arranging the canned items and
sometimes as pahinante. He reported for work from Monday to Saturday 7:00 am to 5:00 pm and during the
employment he was not issued an ID and payslips by the company.
On May 2008 he was not allowed to enter the company premises upon the instruction on Mr. Ruben Ong for the
reason that the latter was courting Javiers daughter. Thereafter, he was terminated from work
.
Fly ace averred that Javier was only an extra helper on pakyaw basis and denying that he was an employee hence
there was no illegal dismissal
.
ISSUE:
Whether there was an ee-er relationship between Javier and Fly Ace.
RULING:
LA:
LA dismissed the complaint for lack of merit on the ground that Javier failed to present proof that he was a regular
employee of Fly Ace.
NLRC:
NLRC favored Javier. It ruled that LA skirted the argument of Javier and immediately concluded that he was not a
regular employee simply because he failed to present proof. It was in their view that pakyaw basis arrangement did
not preclude the existence of ee-er relationship. Javier was a regular employee because there was a reasonable
connection between the particular activity performed by the employee (as pahinante) in relation to the usual
business or trade of the employer (importation, sales and delivery of groceries)
CA:
Annulled the decision of NLRC and reinstated the dismissal of Javiers complaint as ordered by LA. The CA
exercised its authority to make its own factual determination anent the issue of the existence of ee-er relationship
6

between the parties.
Javier did not pass the control test
SC:
The court affirms the assailed CA decision. Javier failed to adduce substantial evidence as basis for grant of relief.
The court is of the considerable view that Javier lies the burden to pass the well settled tests to determine the
existence of ee-er relationship: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power of control the employees conduct. Of these elements, the most important
criterion is whether the employer controls or has reserved the right to control the employee not only as to the result
of the work but also as to the means and methods by which the result is to be accomplished.
Javier was not required to report to work at regular hours; he was not made to register his time in and out
everytime he was contracted to work; he was not subjected to any disciplinary sanction imposed to other employees
for company violations; he was not issued a company ID; he was not accorded the same benefits given to other
employees; he was not registered with SSS; and he was free to leave, accept , and engage in other means of
livelihood as there is no exclusivity of his contracted services being co-terminus with the trip only. All these led to
the conclusion that petitioner is not an employee of respondents.
12
Banez
Abad
Case title Banez v. Hon. Valdevilla (counterclaims of employers against employees)
GR number 128024
Date 9 May 2000
Ponente - GONZAGA_REYES, J
Facts - Petitioner was the sales operations manager of private respondent in its branch in Iligan City. In 1993,
private respondent "indefinitely suspended" petitioner and the latter filed a complaint for illegal dismissal with the
NLRC-Iligan City. LA Palangan found petitioner to have been illegally dismissed. NLRC likewise dismissed the
same for having filed out of time. Elevated by petition for certiorari before SC, the case was dismissed on technical
grounds.
Private respondent filed a complaint for damages before the RTC of Misamis Oriental to which petitioner filed a
motion to dismiss the above complaint. He interposed in the court below that the action for damages, having arisen
from an employer-employee relationship, was squarely under the exclusive original jurisdiction of the NLRC under
Article 217(a), paragraph 4 of the Labor Code and is barred by reason of the final judgment in the labor case. He
accused private respondent of splitting causes of action
Issue whether Art. 217 may apply to employer with regard to its claim of damages against its employees
Ruling - Article 217 should apply with equal force to the claim of an employer for actual damages against its
dismissed employee, where the basis for the claim arises from or is necessarily connected with the fact of
termination,
and
should
be
entered
as
a
counterclaim
in
the
illegal
dismissal case
In the case at bar, private respondent's claim against petitioner for actual damages arose from a prior employeremployee relationship. In the first place, private respondent would not have taken issue with petitioner's "doing
business of his own" had the latter not been concurrently its employee. Thus, the damages alleged in the complaint
below are: first, those amounting to lost profits and earnings due to petitioner's abandonment or neglect of his
duties as sales manager, having been otherwise preoccupied by his unauthorized installment sale scheme; and
second, those equivalent to the value of private respondent's property and supplies which petitioner used in
conducting his "business ".
Second, and more importantly, to allow respondent court to proceed with the instant action for damages would be
to open anew the factual issue of whether petitioner's installment sale scheme resulted in business losses and the
dissipation of private respondent's property. This issue has been duly raised and ruled upon in the illegal dismissal
case.
Respondent court clearly having no jurisdiction over private respondent's complaint for damages.Thus, private
respondent's remedy is not in the filing of this separate action for damages, but in properly perfecting an appeal
from the Labor Arbiter's decision.
13
SMCEU
Abella
SAN
MIGUEL
CORPORATION
EMPLOYEES
UNION-PTGWO
(SMCEU)
v.
Bersamina
186 SCRA 496
Melencio-Herrera, J.
Facts: San Miguel Corporation (SMC) entered into contracts for merchandising services with Lipercon and D Rite.
7

It was agreed that workers employed by contractors were to be paid by the latter. SMCEU, a duly organized union
of rank-and-file employees of SMC, executed a CBA which excludes temporary, probationary or contractual
employees in the scope of the agreement. Later on, the union advised SMC that some Lipercon and D Rite workers
had signed up for unionship and sought the regularization of employment. Failing to receive favourable response
from SMC, the union filed a notice of strike for unfair labor practice. Conciliatory meeting were held to settle the
dispute before the National Conciliation and Mediation Board (NCMB) of DOLE. Series of pickets were staged by
Lipercon and D'Rite workers in various SMC plants and offices which prompted the latter to file the latter to file a
complaint for injunction before respondent court. SMCEU opposed the same on the ground of lack of jurisdiction
of the court over the nature of the action. Respondent court denied the opposition and issued a writ of injunction
on the ground that absence of employee-employer relationship negates a labor dispute.
Issue: Whether respondent court has jurisdiction over the controversy, and whether it involves a labor dispute
Ruling: No. Respondent court has no jurisdiction over the controversy because it involves a labor dispute which
falls within the jurisdiction of the Labor Arbiter. A "labor dispute" as defined in Article 212 (1) of the Labor Code
includes "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
existence of a labor dispute is not negated by the fact that the plaintiffs and defendants do not stand in the
proximate relation of employer and employee. The case matter definitely dwells on the working relationship
between said employees vis-a-vis SanMig. Terms, tenure and conditions of their employment and the arrangement
of those terms are thus involved bringing the matter within the purview of a labor dispute.
Whether or not the Union demands are valid; whether or not SanMig's contracts with Lipercon and D'Rite
constitute "labor-only" contracting and, therefore, a regular employer-employee relationship may, in fact, be said to
exist; whether or not the Union can lawfully represent the workers of Lipercon and D'Rite in their demands against
SanMig in the light of the existing CBA; whether or not the notice of strike was valid and the strike itself legal when
it was allegedly instigated to compel the employer to hire strangers outside the working unit; those are issues the
resolution of which call for the application of labor laws in which jurisdiction belongs to the labor tribunals.
14
Stolt
Borlas
G.R. No. 177498. January 18, 2012
STOLT-NIELSEN TRANSPORTATION GROUP, INC. AND CHUNG GAI SHIP MANAGEMENT, Petitioners, versus- SULPECIO MEDEQUILLO, JR., Respondent.
PEREZ, J.:
Facts: On 6 November 1991(First Contract), Sulpecio Madequillo was hired by Stolt-Nielsen Marine Services, Inc
on behalf of its principal Chung-Gai Ship Management of Panama as Third Assistant Engineer on board the vessel
Stolt Aspiration for a period of nine (9) months. For nearly three (3) months of rendering service and while the
vessel was at Batangas, he was ordered by the ships master to disembark the vessel and repatriated back to Manila
for no reason nor explanation. Upon his return to Manila, he immediately proceeded to the petitioners office where
he was transferred employment with another vessel named MV Stolt Pride under the same terms and conditions
of the First Contract. The Second Contract was noted, approved and certified by the POEA. Petitioners failed and
refused to deploy him with the vessel MV Stolt Pride. He filed a complaint before the Adjudication Office of the
Philippine Overseas Employment Administration (POEA) against the petitioners for illegal dismissal under a first
contract and for failure to deploy under a second contract. The case was transferred to the Labor Arbiter of the
DOLE upon the effectivity of the Migrant Workers and Overseas Filipinos Act of 1995. The Labor Arbiter found the
first contract entered into by and between the complainant and the respondents to have been novated by the
execution of the second contract. Hence, respondents cannot be held liable for the first contract but are clearly and
definitely liable for the breach of the second contract due to constructive dismissal. However, he ruled that there
was no substantial evidence to grant the prayer for moral and exemplary damages. 9The petitioners appealed the
adverse decision before the National Labor Relations Commission assailing that they were denied due process as
they were not properly notified of the hearings and respondent cannot be considered as dismissed from
employment because he was not even deployed yet. NLRC affirmed the decision with modification as to the award
of overtime. Petitioners filed a petition for certiorari and CA affirmed NLRCs decision.
Issue: Whether seafarer can claim damages for non-deployment?
Ruling: Yes. The POEA Standard Employment Contract provides that employment shall commence upon the actual
departure
of
the
seafarer
from
the
airport
or
seaport
in
the
port
of
hire.
We rule that distinction must be made between the perfection of the employment contract and the commencement
of the employer-employee relationship. The perfection of the contract, which in this case coincided with the date of
execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as well as the rest
of the terms and conditions therein. The commencement of the employer-employee relationship, as earlier
discussed, would have taken place had petitioner been actually deployed from the point of hire. Thus, even before
8

the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract
was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the
erring party. Thus, if the reverse had happened, that is the seafarer failed or refused to be deployed as agreed upon,
he would be liable for damages.
15
Republic
Gubantes
Republic vs Asiapro Cooperative
SSS authority to determine E-ER
FACTS
In the discharge of Asiapros objectives, the cooperative entered into several service contracts with Stanfilco, a
division of DOLE Phil. Inc and a company based in Bukidnon. The owners-members do not receive compensation
or wages from the respondent cooperative. Instead, they receive a share in the service surplus which Asiapro earns
from different areas of trade it engages in. In order to enjoy the benefits under the SS Law of 1997, the ownersmembers of Asiapro assigned to Stanfilco requested the services of the latter to register them with SSS as selfemployed and to remit their contributions as such. SSS send a letter to respondent cooperative informing the latter
that based on the Service Contract it executed with Stanfilco, Asiapro is actually a manpower contractor supplying
employees, and so, it is an employer of its owners-members working with Stanfilco. Thus, Asiapro should register
itself with SSS as an employer and make the corresponding report and remittance of premium contributions. SSS
filed a petition before SSC against Asiapro and Stanfilco praying that either of them be directed to register as an
employer and to report Asiapro's owners-members as covered employees under the compulsory coverage of SSS.
Respondent cooperative filed its answer with MtD alleging that no EE relationship exists, thus SSC has no
jurisdiction over the respondent cooperative.
ISSUE
WON SSS can determine the existence of EE relationship.
RULING
Yes. SSC's jurisdiction is clearly stated in Sec.5 of RA 8282 as well as Sec.1 Rule III of the 1997 SS Revised Rules of
Procedure. It is clear from the aforesaid provisions that any issue regarding compulsory coverage of the SSS is well
within the exclusive domain of the petitioner SSC. It is imporant to note that the mandatory coverage under the SSS
law is premised on the existence EE-relationship. Consequently, the respondent cooperative being the employer of
its owners-members must register as employer and report its owners-members as covered members of the SSS and
remit the necessary premium contributions in accordance with the SS Law of 1997.
16
MySan
Jimenez
M.Y. San Biscuits v. Laguesma
GR No. 95011, April 22, 2009 Med-Arbiter: Authority to determine EER
Facts:
Private respondent Philippine Transport and General Workers Organization (Union for short) file a petition for
certification election as a bargaining agent for a group of employees of petitioner M.Y. San Biscuits, Inc. before the
med-arbiter
of
the
Department
of
Labor
and
Employment
(DOLE).
After the parties submitted their position papers, the med-arbiter issued an order dismissing the petition for lack of
merit as there is no employer-employee relationship between petitioner and the delivery drivers/helpers
represented by respondent Union. Respondent Union and several others filed before the NLRC Branch of Region
No. IV a complaint for underpayment of wages; non-payment of 13th month pay; service incentive pay and COLA;
damages
and
attorney's
fees.
The labor arbiter rendered a decision dismissing the said complaint on the ground that there is no employeremployee relationship between the parties. Private respondent appealed to the
NLRC.
In the certification election case, private respondent appealed to the Secretary of DOLE. DOLE Secretary Franklin
Drilon promulgated a resolution reversing the decision of the med-arbiter, thus finding that there exists an
employer-employee relationship between petitioner and private respondent.
Petitioner filed a motion for reconsideration of this resolution and asking that the action be held in abeyance
pending consideration of the other case where the LA rendered a decision declaring the absence of EER between
the parties. Public respondent issued an order denying the relief sought in the manifestation of petitioner.
Petitioner filed a motion for reconsideration therefrom but it was denied, hence this petition.
Issue:
Whether the med-arbiter or Secretary of Labor and Employment has the authority to determine the existence of
EER
between
the
parties
in
a
petition
for
certification
of
election
Ruling:
Yes. The BLR has the original and exclusive jurisdiction to inter alia, decide all disputes, grievances or problems
arising from or affecting labor-management relations in all workplaces whether agricultural or non-agricultural.
Necessarily, in the exercise of this jurisdiction over labor-management relations, the med-arbiter has the authority,
9

original and exclusive, to determine the existence of an employer-employee relationship between the parties.
17
Atlas
Jurado
ATLAS FARMS, INC. v. NATIONAL LABOR RELATIONS COMMISSION, JAIME O. DELA PEA and MARCIAL I.
ABION
G.R. No. 142244. November 18, 2002
Ponente. QUISUMBING, J
Facts. Jaime O. dela Pea was employed as a veterinary aide by petitioner and terminated. He was re-hired by
petitioner and given the additional job of feedmill operator. He was instructed to train selected workers to operate
the feedmill. He was allegedly caught urinating and defecating on company premises not intended for the purpose.
The farm manager of petitioner issued a formal notice directing him to explain why disciplinary action should not
be taken against him for violating company rules and regulations. Pea never bothered to explain thus he was
terminated with separation pay.
Marcial I. Abion was a carpenter/mason and a maintenance man whose employed by petitioner and allegedly
caused the clogging of the fishpond drainage resulting in damages worth several hundred thousand pesos when he
improperly disposed of the cut grass and other waste materials into the ponds drainage system. Upon failure to
explain what happened after notice, he was terminated with separation pay.
Pea and Abion filed separate complaints for illegal dismissal that were later consolidated. Both claimed that their
termination from service was due to petitioners suspicion that they were the leaders in a plan to form a union to
compete and replace the existing management-dominated union. Labor arbiter dismissed their complaints on the
ground that the grievance machinery in the collective bargaining agreement (CBA) had not yet been exhausted.
Private respondents availed of the grievance process, but later on refiled the case due to lack of sympathy on
petitioners part to engage in conciliation proceedings. Petitioner filed a motion to dismiss, on the ground of lack of
jurisdiction as it belonged to the grievance machinery and thereafter the voluntary arbitrator, as provided in the
CBA. Labor arbiter dismissed the complaint for lack of merit. Thus, private respondents brought the case to the
NLRC, which reversed the labor arbiters decision. Dissatisfied with the NLRC ruling, petitioner went to the Court
of
Appeals
which
affirmed
the
same.
Hence
this
petition.
Issue. Whether the labor arbiter and the NLRC had jurisdiction to decide complaints for illegal dismissal?
Ruling. Anent the second issue, Article 217 of the Labor Code provides that labor arbiters have original and
exclusive jurisdiction over termination disputes. A possible exception is provided in Article 261 of the Labor Code,
which provides thatThe Voluntary Arbitrator or panel of voluntary arbitrators shall have original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in
the immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those
which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances
under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining
Agreement shall mean flagrant and or malicious refusal to comply with the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment
shall not entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary
Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the same to the grievance
Machinery or Arbitration provided in the Collective Bargaining Agreement.
Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the
grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where there was already actual
termination, with alleged violation of the employees rights, it is already cognizable by the labor arbiter.
In sum, we conclude that the labor arbiter and then the NLRC had jurisdiction over the cases involving private
respondents dismissal, and no error was committed by the appellate court in upholding their assumption of
jurisdiction.
18
Perpetual
Otsuka
19
Austria
Austria v. NLRC
GR.no. 124382 Aug. 16, 1999
Kapunan, J.:
Piedad
Facts: The Central Philippine Union Mission Corporation of the Seventh day Adventist (SDA) is a religious
corporation to which Pastor Austria has worked as an evangelist. He advanced position under a propmotion until
10

his services was terminated due to an alleged unremitted offerings collected by his wife and several other
altercations with other fellow Pastors. Austria filed for Illegal Dismissal against the SDA and was given a favorable
decision. When elevated to the NLRC, SDA received a favorable decision. Thus, Austria now the jurisdiction in this
case.
Issue: Whether the NLRC has jurisdiction with this case.
Ruling: Yes. This case does not concern an ecclesiastical or purely religious affair as to the bar the State from taking
cognizance from the same.
What is involved here is the relationship of the church as an employer and the minister as an employee. It is purely
secular and has no relation with the practice of faith.
In this case, petitioner was not excommunicated but was terminated from employment. Coupled with this act, it is
evident that the SDA furnished the NLRC with the copy of the petitioners letter of termination. It is an eloquent
admission of the jurisdiction of the NLRC.
20
Department
Rigor
DEPARTMENT OF FOREIGN AFFAIRS VS. NLRC
G.R.NO. 113191 SEPTEBER 18, 1996
VITUG, J.
FACTS:
Private respondent, Ronald E. Javier initiated NLRC-NCR Case No. 00-01-0690-93 for his alleged illegal dismissal
by the Asian Development Bank (ADB) and the latter's violation of the "labor-only" contracting law. Two
summonses were served, one sent directly to the ADB and the other through the Department of Foreign Affairs
("DFA"), both with a copy of the complaint. Forthwith, the ADB and the DFA notified respondent Labor Arbiter
that the ADB, as well as its President and Officers, were covered by an immunity from legal process except for
borrowings, guaranties or the sale of securities pursuant to Article 50(1) and Article 55 of the Agreement
Establishing the Asian Development Bank (the "Charter") in relation to Section 5 and Section 44 of the Agreement
Between The Bank And The Government Of The Philippines Regarding The Bank's Headquarters (the
"Headquarters Agreement"). The Labor Arbiter took cognizance of the complaint on the impression that the ADB
had waived its diplomatic immunity from suit. It decided a decision in favor of the private respondent, and awarded
the necessary benefits of his employment. The DFA and including the office of the solicitor general opposed the
decision in virtue to the argument that the jurisdiction of this case must be held in the office of the ombudsman and
not to the labor arbiter. Thus, ADB was really immune from any action against it, due to the cloak of diplomatic
immunity he possess.
ISSUE: Whether or not the Office of the Ombudsman has the better jurisdiction over ADB, than the Labor Arbiter?
RULING: YES
Private respondent argues that, by entering into service contracts with different private companies, ADB has
descended to the level of an ordinary party to a commercial transaction giving rise to a waiver of its immunity from
suit.
In
the
case
of
Holy
See
vs.
Hon.
Rosario,
Jr.,
the
Court
has
held:
There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to
the classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the Courts of
another sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only
with regard to public acts or acts jure imperii of a state, but not with regard to private act or acts jure gestionis.
x x x x x x x x x
Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test.
Such an act can only be the start of the inquiry. The logical question is whether the foreign state is engaged in the
activity in the regular course of business. If the foreign state is not engaged regularly in a business or trade, the
particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an
incident thereof, then it is an act jure imperii, especially when it is not undertaken for gain or profit.
The service contracts referred to by private respondent have not been intended by the ADB for profit or gain but are
official acts over which a waiver of immunity would not attach.
21
Negros
Valera
NEGROS METAL CORP V LAMAYO
FACTS:
Lamayo was hired by Negros as machinist. He was suspended by the company when he was asked why he was using
the grinder and replied that he would finish his work faster. He was again suspended for 10 days for allegedly
failing to sign the memorandum suspending him earlier. After the suspension he was informed that his services had
11

been terminated and that he should draft his resignation letter drawing the respondent to file a complaint for illegal
dismissal.
Petitioner contended that complaint should be dismissed because the LA had no jurisdiction over it since under
their CBA such matters must first be resolved before the companys grievance machinery.
ISSUE:
Whether LA has jurisdiction over the case.
RULING:
LA: Complainant was illegally dismissed.
NLRC: Set aside the ruling of LA for disposition based on the companys grievance procedure
.
CA: Set aside the NLRC resolution and reinstated the LA decision.
SC: As a general rule, termination disputes should be brought before a labor arbiter except when the parties under
Art 262 mistakably express that they agree to submit the same to voluntary arbitration.
Under Art 217 it is clear that the labor arbiter has original and exclusive jurisdiction over termination disputes. On
the other hand, under Art 261, a voluntary arbitrator has original and exclusive jurisdiction over grievances arising
from the interpretation or enforcement of company policies. Hence the issue should be brought before the LA.
22
Navarro
Abad
Case title Navarro III v. Damasco (termination is not grievable issue)
GR number 101875
Date 14 July 1995
Ponente - QUIASON, J
Facts - Petitioner was employed as typist of private respondent at its plant in Quezon, Bukidnon. Petitioner was
then dismissed from the service for having violated paragraph 3.B (Conduct and Behavior) of the Code of Employee
Discipline, after he harassed a co-employee within the company premises. The President of the Mindanao Sugar
Workers Union, for and in behalf of petitioner, and Personnel Officer of private respondent, agreed to submit the
case of petitioner to voluntary arbitration to which the latter rendered decision dismissing petitioner from his
employment and holding that private respondent did not violate the provisions of the grievance procedure under
the CBA. Hence, the instant petition was filed.
Issue whether the
instant case is grievance that must be submitted to the grievance machinery
Ruling - The instant case is not a grievance that must be submitted to the grievance machinery. What are subject of
the grievance procedure for adjustment and resolution are grievances arising from the interpretation or
implementation of the collective bargaining agreement (Labor Code of the Philippines, as amended by R.A. No.
6715, Art. 260). The acts of petitioner involved a violation of the Code of Employee Discipline, particularly the
provision penalizing the immoral conduct of employees. Consequently, there was no justification for petitioner to
invoke the grievance machinery provisions of the Collective Bargaining Agreement.
The incident happen within the company premises, i.e. the ladies' dormitory which was located inside the plant site,
but both of them are employees of private respondent. Management would then be at the mercy of its employees if
it cannot enforce discipline within company premises solely because the quarrel is purely personal matter. The
harassment of an employee by a co-employee within the company premises even after office hours is a work-related
matter considering that the peace of the company is thereby affected. The Code of Employee Discipline is very clear
that immoral conduct "within the company premises regardless of whether or not [it is] committed during working
time" is punishable.
23
Negros
Abella
Negros Metal Corp. v. Lamayo
G.R. No. 186557, August 25, 2010
Carpio-Morales, J.
Facts: Armelo Lamayo worked for Negros Metal Corporation as a machinist. While Lamayo was working at the
companys foundry grinding some tools, the company manager called his attention to the fact that he was using the
grinder. Lamayo replied that since the machine was bigger, he would finish the work faster. Since Lamayos
explanation was found unsatisfactory, he was charged of loitering and warned via memorandum. Taking the
warning as a three-day suspension under the company rules, Lamayo reported for work after three days, only to be
meted with another ten-day suspension, for allegedly failing to sign the memorandum suspending him earlier. After
serving the second suspension, he was informed by the company that his services had been terminated and that he
should draft his resignation letter. Lamayo filed a complaint for illegal dismissal with the Labor Arbiter. Negros
Metal Corporation averred that the complaint should be dismissed because the Labor Arbiter had no jurisdiction
over the same since under the Collective Bargaining Agreement, such matters must first be brought before the
12

companys grievance machinery. The LA held that Lamayo was illegally dismissed. Upon appeal, the NLRC set
aside the ruling of the LA and remanded the case to the LA for disposition based on the companys grievance
procedure. Lamayo appealed to the CA, which set aside the NLRC decision and reinstated the LA decision.
Issue: Whether Lamayo should have gone through the companys grievance machinery first before filing
acomplaint for illegal dismissal with the Labor Arbiter.
Ruling: NO. Under Article 217, it is clear that a Labor Arbiter has original and exclusive jurisdiction over
termination disputes. On the other hand, under Article 261, a voluntary arbitrator has original and exclusive
jurisdiction over grievances arising from the interpretation or enforcement of company policies.
As a general rule then, termination disputes should be brought before a Labor Arbiter, except when the parties,
under Article 262,unmistakably express that they agree to submit the same to voluntary arbitration. In the present
case, the CBA provision on grievance machinery being invoked by Negros Metal does not expressly state that
termination disputes are included in the ambit of what may be brought before the companys grievance machinery.
Therefore, the LA had original and exclusive jurisdiction over Lamayos complaint for illegal dismissal.
24
University
Borlas
G.R. No. 181146. January 26, 2011
THE UNIVERSITY OF THE IMMACULATE CONCEPTION and MO. MARIA ASSUMPTA DAVID, RVM,
Petitioners, - versus - NATIONAL LABOR RELATIONS COMMISSION and TEODORA AXALAN, Respondents.
CARPIO, J.:
Facts: Private respondent Teodora C. Axalan is a regular faculty member in University of the Immaculate
Conception, situated in Davao City. She then received a memorandum6 from Dean Maria Rosa Celestial asking her
to explain in writing why she should not be dismissed for having been absent without official leave when she
attended a seminar in Quezon City on website development. She claimed that she held online classes while
attending the seminar and would not be marked absent even if they were not physically present in the classroom as
long as they conducted online classes. Dean Celestial relayed to Axalan that no administrative charge would be filed
if Axalan would admit having been absent without official leave and write a letter of apology seeking forgiveness
however Axalan opted not to. The Dean notified Axalan that the university president had created an ad hoc
grievance committee to investigate the AWOL charge. The Dean Celestial informed Axalan of her second AWOL
charge for her participation in the paralegal seminar in Baguio City was the subject of a second AWOL charge and
asked to explain in writing why no disciplinary action should be taken against her. She explained that she sought
the approval of her application for official leave before she left. The university president approved the committees
recommendation who found Axalan to have incurred AWOL with one year suspension without pay. Axalan filed a
complaint against the university for illegal suspension, constructive dismissal, reinstatement with backwages, and
unfair labor practice with prayer for damages and attorneys fees. The university moved to dismiss the complaint on
the ground that the Labor Arbiter had no jurisdiction over the subject matter of the complaint and maintained that
jurisdiction lay in the voluntary arbitrator. Motion was denied. Meanwhile, upon the expiration of the one-year
suspension, Axalan promptly resumed teaching at the university. The LA ruled in favor of Axalan that said
suspension amounted to constructive dismissal and entitling her to reinstatement and backwages. NLRC and CA
affirmed said decision.
Issue: Whether the voluntary arbitrator had jurisdiction over the labor dispute of constructive dismissal?
Ruling: Article 217 of the Labor Code states that unfair labor practices and termination disputes fall within the
original and exclusive jurisdiction of the Labor Arbiter except as otherwise provided under this code. Article 262
states that The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also
hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. In San Miguel
Corp. v. NLRC, the Court ruled that for the exception to apply, there must be agreement between the parties clearly
conferring jurisdiction to the voluntary arbitrator. Such agreement may be stipulated in a collective bargaining
agreement. However, in the absence of a collective bargaining agreement, it is enough that there is evidence on
record showing the parties have agreed to resort to voluntary arbitration. As can be gleaned from the transcript of
stenographic notes of the administrative hearing, the parties in this case clearly agreed to resort to voluntary
arbitration.
25
Ramirez
Gubantes
M. Ramirez Industries vs Sec. of Labor
LA vs Regional Director under Art. 129 LC Requisites
Carolyn Alfonso and other employees filed a complaint with the Regional office of the Department of Labor in Cebu
City, alleging non-paymeent of minimum wage, living allowances and non-compliance with other labor standard
laws against M.Ramirez Industries. An inspection was conducted in the company premises and after verification of
allegations, the case was recognized. Petitioner filed an ex parte motion to dismiss the case alleging voluntary
desistance through a letter by the private respondents. The Regional Director denied petitioner's motion because
some of the complainants were deceived to sign the letter. The petitioner filed a motion to remand the case to the
13

NLRC, contending that the matter was outside the jurisdiction of the Regional Director. Petitioner moved for a
reconsideration of the RD's order, which was treated as an appeal to the Secretary of Labor and Employment. The
SoLE affirmed RD's decision. The petitioner filed this petition on the ground that RD has no jurisdiction to take
cognizance of the case and that the case falls within the original and exclusive jurisdiction of the LA.
ISSUE
WON the RD has jurisdiction over the case.
RULING
Yes. E.O. No. 111 conferred jurisdiction over money claims of laborers on Regional Directors, concurrently with
Labor Arbiters. According to Art. 129, upon complaint of any interested party, the Regional Diretor of the
Department of Labor and Employment or any of the duly authorized hearing officers of the Departmentis
empowered, provided, that such complaint does not include a claim for reinstatement and the aggregate money
claims of each employee or househelper does not exceed P5,000. In this case, although no longer employees of
petitioner, private respondents do not seek reinstatement and the aggregate moeny claim of each of them does not
exceed
P5,000.
The RD may not be divested of jurisdiction over these claims, unless the ff elements are present
1. The employer contests the findings of the labor regulation officer and raises issues thereon
2. That in order to resolve such issues, there is need to examine evidentiary matters
3. Such matters are not verifiable in the normal cause of inspection.
These conditions do not exist in this case and, therefore, there can be no question that the Regional Director had
jurisdiction to decide the claims of private respondents.
26
Consolidated
Jimenez
Consolidated Broadcasting System, Inc. Vs. Oberio
GR No. 168424, June 8, 2007 (Forum Shopping)
Facts:
Respondents alleged that they were employed as drama talents by DYWB-Bombo Radyo, a radio station owned
and operated by petitioner Consolidated Broadcasting System, Inc. They reported for work daily for six days in a
week and were required to record their drama production in advance. Their drama programs were aired not only in
Bacolod City but also in the sister stations of DYWB in the Visayas andMindanao areas.
Sometime in August 1998, petitioner reduced the number of its drama productions from 14 to 11, but was opposed
by respondents. After the negotiations failed, the latter sought the intervention of the Department of Labor and
Employment (DOLE), which on November 12, 1998, conducted through its Regional Office, an inspection of DWYB
station. The results thereof revealed that petitioner is guilty of violation of labor standard laws, such as
underpayment of wages, 13th month pay, non-payment of service incentive leave pay, and non-coverage of
respondents under the Social Security System.
Petitioner contended that respondents are not its employees and refused to submit the payroll and daily time
records despite the subpoena duces tecum issued by the DOLE Regional Director. Petitioner further argued that
the case should be referred to the NLRC because the Regional Director has no jurisdiction over the determination
of the existence of employer-employee relationship which involves evidentiary matters that are not verifiable in the
normal course of inspection.
Respondents Oberio and Delta were suspended for minor lapses and the payment of their salaries were
purportedly delayed. Pending the outcome of the inspection case with the Regional Director, respondents were
barred by petitioner from reporting for work; thus, the former claimed constructive dismissal
.
Respondents filed a case for illegal dismissal, underpayment/non-payment of wages and benefits plus damages
against petitioner. The Labor Arbiter dismissed the case without prejudice while waiting for the decision of the
Secretary of Labor on the same issue of the existence of an employer-employee relationship between petitioner and
respondents.
NLRC rendered a decision holding that respondents were regular employees of petitioner who were illegally
dismissed by the latter. It further held that respondents complied with the requirements of the rule on forum
shopping.
Issue:
Whether the respondents violates the rule on forum shopping
Ruling:
14

No. Under Article 217 of the Labor Code, termination cases fall under the jurisdiction of Labor Arbiters. Whereas,
Article 128 of the same Code vests the Secretary of Labor or his duly authorized representatives with the power to
inspect the employers records to determine and compel compliance with labor standard laws. The exercise of the
said power by the Secretary or his duly authorized representatives is exclusive to cases where employer-employee
relationship still exists. Thus, in cases where the complaint for violation of labor standard laws preceded the
termination of the employee and the filing of the illegal dismissal case, it would not be in consonance with justice to
charge the complainants with engaging in forum shopping when the remedy available to them at the time their
causes of action arose was to file separate cases before different fora. Besides, in the instant case, respondent
Danny Oberio disclosed in the verification the pendency of the case regarding wage differential. In addition, said
case was discussed in detail in the position paper, evincing the absence of any intention on the part of respondents
to mislead the Labor Arbiter.
27
Rizal
Jurado
Rizal Security and Protective Services V. Hon. Maraan
GR 124915. Feb. 18,08
Ponente Chico-Nazarion
Facts: Petitioner is a corporation engaged in the business of security agency. The public respondent is the DOLE
Regional Director for Cordillera Region and private respndent was the former employee of the said security qgnecy.
During the emplyoment of the private respondent, he sought the assistance of the DOLE for the petitioner's alleged
violation such as illegal deduction of wages and underpayment of night shift differential. However, Petitioner
cqlimed that the DOLE had lost its jurisdiction because there was no longer any employer- employee relationship
between the parties due to the previous resignation of the private respondent
Issue. Whether the claim of the petitioner is valid?
Held. No. It is settled rule that the jurisdiction of a court over the subject matter of an action is determined by the
allegations in the complaint at the time of the filing, irrespective of whether the plaintiff is entitled to recover any
claims asserted therein
28
Ex- Bataan
Otsuka
29
Peoples
Peoples Broadcasting v. Secretary of Labor
GR.no. 179652 Mar. 6, 2012
Piedad
Tinga, J.:
Facts: Jandeleon Juezan filed a complaint against the petitioner for illegal deduction and non- payment of service
and other benefits before the DOLE. At a plant inspection made by a Labor Inspector, petitioner denied the
existence of an employer- employee relation and instead, characterized the complainant as a talent. The Regional
Director ruled that the respondent is the employer of Juenzan. Petitioner raised contention in the Court of Appeals
contending among others that the DOLE has no jurisdiction over respondent s claim and that it must be lodged in
the
NLRC.
Issue: Whether or not the DOLE has jurisdiction over respondents claim in the existence of an employer employee
relationship.
Ruling: No. In this case, the DOLE has no jurisdiction.
In Article 128 (b) of the Labor Code as amended by RA 7730, the clause in cases where the employer-employee
still exists signifies that the employer- employee relationship must have existed even before the emergence of the
controversy. It can be assumed that the DOLE in the exercise of visitorial and enforcement powers somehow has to
make a determination of EER but only for enforcing Labor Standards provisions. But the relationship questionis
still
lodged
in
the
NLRC.
Thus, the Dole may exercise its power under Art. 128 when: 1) Employer- Employee Relationship exists, and 2)
There are violations of any Labor Laws.
30
Meteoro
Rigor
METEORO VS. CREATIVE CREATURES
G.R. NO. 171275 JULY 13, 2009
NACHURA, J.:
FACTS:
Creative Creatures hired Victor Meteoro and the rest of the petitioners on various dates as artists, carpenters, and
welders, tasked to design, create, assemble, set-up, and dismantle props, and provide sound effects to Creatives
15

various TV programs and movies. In 1999, Meteoro and the others filed a complaint against Creative for nonpayment of labor standards incentives with the DOLE-NCR. An inspection was conducted. Creative claimed that
the petitioners were only contractual workers, and as such, no employer-employee relationship existed. Thus, the
DOLE could not have exercised jurisdiction over the case, for it had none. It added that the petitioners were freelance individuals, performing special services with skills and expertise inherently exclusive to them like actors,
actresses, directors, producers, and script writers, such that they were treated as special types of workers.
Petitioners, on the other hand, aver that they were employees because the elements of an employer-employee
relationship existed. Subsequently, petitioners filed a complaint for illegal dismissal against Creative, with prayer
for payment of overtime pay, premium pay for holiday and rest day, holiday pay, service incentive leave pay, 13Th
month pay, and attorneys fees before the NLRC. A few months after, DOLE Regional Director Maximo Baluyot Lim
issued an order directing Creative to pay petitioners. On appeal, DOLE Secretary Patricia Sto. Tomas upheld the
DOLE Regional Directors findings. She stated that the Secretary of Labor or his duly authorized representative is
allowed to use his visitorial and enforcement powers to give effect to labor legislation regardless of the amount
involved. On appeal, the CA dismissed the case against Creative for lack of jurisdiction. Hence, this petition for
review on certiorari.
ISSUE:
Whether
or
not
the
DOLE-NCR
properly
exercised
its
jurisdiction
over
the
case.
RULING: NO.
The DOLE Secretary and her authorized representatives, such as the DOLE-NCR Director, have jurisdiction to
enforce compliance with labor standards laws under the broad visitorial and enforcement powers conferred by
Article 128 of the Labor Code, and expanded by RA No. 7730. But this notwithstanding, the power of the Regional
Director to hear and decide money claims is not absolute. The last sentence of Article 128 (b) of the Labor Code,
otherwise known as the- exception clause, it provides an instance when the Regional Director or his representatives
may be divested of jurisdiction over a labor standards case. Under prevailing jurisprudence, the so-called exception
clause has the following elements, all of which must concur:
(a) That the employer contests the findings of the labor regulations officer and raises issues thereon;
(b) That in order to resolve such issues, there is a need to examine evidentiary matters; and
(c)
That
such
matters
are
not
verifiable
in
the
normal
course
of
inspection.
In the instant case, Creative registered its objection to the findings of the labor inspector at the earliest opportunity.
It is clear that Creative contested and continues to contest the findings and conclusions of the labor inspector. Also,
the question of whether or not petitioners were independent contractors/project employees/free-lance workers is a
question of fact that necessitates the examination of evidentiary matters not verifiable in the course of inspection.
Verily, the Regional Director and the Secretary of Labor are divested of jurisdiction to decide the case, and the
NLRC is the agency clothed with authority to do so. Petition denied for lack of merit. CA decision affirmed.
To contest means to raise questions as to the amounts complained of or the absence of violation of labor
standards laws; or, issues as to the complainants right to labor standards benefits. Raising lack of jurisdiction alone
is not the contest contemplated by the exception clause. It is necessary that the employer contest the findings of
the labor regulations officer during the hearing or after receipt of the notice of inspection results. More importantly,
the key requirement for the Regional Director and the DOLE Secretary to be divested of jurisdiction is that the
evidentiary matters be not verifiable in the course of inspection. Where the evidence presented was verifiable in the
normal course of inspection, even if presented belatedly by the employer, the Regional Director, and later the
DOLE Secretary, may still examine it; and these officers are not divested of jurisdiction to decide the case.
31
Norkis
Valera
NORKIS TRADING V BUENAVISTA
FACTS:
Respondents Buenavista, Fabroa, Cape, Tulod, Dondoyano and Villarista were skilled workers assigned in the
operation of industrial and welding machines owned by Norkis Trading for its business. They filed a complaint for
illegal suspension, illegal dismissal, unfair labor practice, and other monetary claims before the NLRC contending
that they were regarded by Norkis as members of PASAKA (Panaghuisa sa Kauswagar Corp), which was deemed as
independent contractor that merely deployed the respondents for Norkis. The respondents belived that they were
regular employees of Norkis.
Respondents filed before the DOLE a complaint against Norkis and PASAKA for labor only contacting and nonpayment of minimum wage and overtime pay. The filing of the complaint led to the suspension of respondents.
Later, the were informed by PASAKA that they were transferred to Norkis Tradings sister company, Porta Coeli
Industrial Corp as washers of multicab vehicles.
ISSUE:
16

RULING:
LA: Dismissed the complaint for lack of merit and directed PASAKA to accept complainants for work.
DOLE: PASAKA was engaged in labor-only contracting for (1) failing to prove that it had substantial capital; (2) the
machineries, equipment and supplies used by the respondents in the performance of their duties were all owned by
NORKIS and PASAKA; (3) respondents membership with PASAKA as cooperative was inconsequential to the
employment with NORKIS; (4) Norkis and PASAKA failed to prove that their sub-contracting arrangements were
covered by any of the conditions set forth in Sec 6 of D.O 10; (5) Norkis and PASAKA failed to dispute the
respondents claim that their work was supervised by leadmen and production supervisors of Norkis; and (6)
Norkis and PASAKA failed to dispurte the respondents allegation that their salaries were paid by employees of
Norkis
Trading.
NLRC: affirmed the decision of LA with modification.
The respondents were not illegally suspended from work, as it was their membership in the cooperative that was
suspended after they were found to have violated the cooperatives rules and regulations.
NLRC declared that La had no jurisdiction over the dispute because the respondents were not employees but
members of PASAKA. The dispute was not a labor dispute but an intra-corporate dispute.
CA: reversed and set aside the decision of NLRC. Norkis tradings refusal to accept them back to their former
positions, offering them instead to accept a new assignment as washers of vehicles in their sister company was a
demotion that amounted to a constructive dismissal.
SC: Petition by Norkis under rule 65 was denied.
Factual findings of labor officials may be examined by the courts when there is a showing that they were arrived at
arbitrary or in disregard of evidence on record.
This case falls on the exception to the general rule that findings of fact of labor officials are to be accorded respect
and finality on appeal.
32
Del Monte
Abad
Case title Del Monte Phils, Inc. v. Saldivar (jurisdiction over money claims)
GR number 158620
Date 11 October 2006
Ponente - TINGA, J
Facts - Associated Labor Union (ALU) is the exclusive bargaining agent of plantation workers of petitioner Del
Monte Philippines, Inc. (Del Monte) in Bukidnon. Respondent Timbal, as a rank-and-file employee of Del Monte, is
also a member of ALU. Del Monte and ALU entered into a Collective Bargaining Agreement (CBA).
Timbal, along with 4 other employees were charged by ALU for disloyalty to the union, particularly for encouraging
defections to a rival union, the National Federation of Labor (NFL). The matter was referred to a body within the
ALU organization, ominously named Disloyalty Board. ALU Disloyalty Board concluded that Timbal was guilty of
acts or conduct inimical to the interests of ALU. It found that the acts imputed to Timbal were partisan activities,
prohibited since the freedom period had not yet commenced as of that time. Thus, the Disloyalty Board
recommended the expulsion of Timbal from membership in ALU, and likewise her dismissal from Del Monte in
accordance with the Union Security Clause in the existing CBA between ALU and Del Monte.
Del Monte terminated Timbal and her co-employees, noting that the termination was upon demand of [ALU]
pursuant to provisions of the CBA.
Labor Arbiter affirmed that all five (5) were illegally dismissed and ordered Del Monte to reinstate complainants,
including Timbal, to their former positions and to pay their full backwages and other allowances. This was reversed
by the NLRC and modified by the CA which held that only Timbal was illegally dismissed.
In the present petition, Del Monte submits 2 grounds for review. First, it argued that an employer who acted in
good faith in dismissing employees on the basis of a closed-shop provision is not liable to pay fullbackwages and
2nd,
ALU
should
be
made
liable
to
Del
Monte
pursuant
to
the
CBA
Issue
whether
the
Labor
Arbiter
correctly
awarded
full
backwages
to
Timbal.
Whether Court of Appeals erred when it did not rule on Del Montes claim for reimbursement against ALU
Ruling - The Labor Arbiters ruling, which entitled Timbal to claim full backwages and other allowances, without
qualifications and diminutions, computed from the time [she was] illegally dismisse[d] up to the time [she] will be
actually reinstated, conforms to Article 279 of the Labor Code. Hence, the Court of Appeals was correct in
17

affirming
the
Labor
Arbiter
insofar
as
Timbal
was
concerned.
No. The law indubitably precludes the Labor Arbiter from enforcing money claims arising from the
implementation of the CBA, the CBA herein complementarily recognizes that it is the Voluntary Arbitrators which
have jurisdiction to hear the claim. The Labor Arbiter correctly refused to exercise jurisdiction over Del Montes
cross-claim, and the Court of Appeals would have no basis had it acted differently
In reconciling the grants of jurisdiction vested under Articles 261 and 217 of the Labor Code, the Court has
pronounced that the original and exclusive jurisdiction of the Labor Arbiter under Article 217(c) for money claims
is limited only to those arising from statutes or contracts other than a Collective Bargaining Agreement. The
Voluntary Arbitrator or Panel of Voluntary Arbitrators will have original and exclusive jurisdiction over money
claims arising from the interpretation or implementation of the Collective Bargaining Agreement and, those arising
from the interpretation or enforcement of company personnel policies, under Article 261. Thus, the Labor Arbiter
in the instant case could not properly pass judgment on the cross-claim is further strengthened by the fact that Del
Monte and ALU expressly recognized the jurisdiction of Voluntary Arbitrators in the CBA.
33
Estate
Abella
Estate of Nelson Dulay v. Aboitiz Jebsen Maritime, Inc.
G.R. No. 172642, June 13, 2012
Peralta, J.
Facts: Nelson Dulay worked as a seaman and, later on, as a bosun in General Charterers Inc., a subsidiary of Aboitiz
Jebsen Maritime, Inc. 25 days after the completion of his contract, Nelson died due to acute renal failure secondary
to septicaemia. His wife, Merridy Jane, claimed for death benefits through the grievance procedure of the CBA.
However, it was declared deadlocked as Aboitiz refused to grant the benefits. Merridy Jane then filed a complaint
with NLRC in General Santos City against respondents for death and medical benefits and damages. An amount of
P20 000 was released by respondent pursuant to the CBA. However, Merridy Jane contended that she is entitled
for $90 000. Respondent asserted that NLRC had no jurisdiction over the action on account of the absence of
employee-employer relationship between GCI and Nelson at the time of the latters death. The LA ruled in favor of
Nelson. The same was affirmed by NLRC. However, on appeal, CA ruled that it involves the interpretation and
application of the provisions of the CBA. As such, jurisdiction belongs to VA and not to the LA.
Issue: Whether the VA has jurisdiction over the case.
Ruling: Yes. The issue in the complaint clearly involves the interpretation or implementation of the CBA and thus,
jurisdiction belongs with VA. Articles 217(c) and 261 of the Labor Code provides that voluntary arbitrators have
jurisdiction over cases arising from the interpretation or implementation of collective bargaining agreements. In
any case, the Court agrees with petitioner's contention that the CBA is the law or contract between the parties.
Article13.1 of the CBA entered into by and between respondent GCI and AMOSUP, the union to which petitioner
belongs, provides that in case of conflict in the interpretation or application of the provisions of the CBA, or
enforcement of company policies, it shall be settled through negotiation, conciliation or voluntary arbitration.
From the foregoing, it is clear that the parties, in the first place, really intended to bring to conciliation or voluntary
arbitration any dispute or conflict in the interpretation or application of the provisions of their CBA. It is settled
that when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to
voluntary arbitration then that procedure should be strictly observed.
In the same manner, Section 29 of the prevailing Standard Terms and Conditions Governing the Employment of
Filipino Seafarers on Board Ocean Going Vessels, promulgated by the Philippine Overseas Employment
Administration (POEA), provides that in cases of claims and disputes arising from this employment, the parties
covered by a collective bargaining agreement shall submit the claim or dispute to the original and exclusive
jurisdiction of the voluntary arbitrator or panel of arbitrators. It is clear from the above that the interpretation of
the DOLE, in consultation with their counterparts in the respective committees of the Senate and the House of
Representatives, as well as the DFA and the POEA is that with respect to disputes involving claims of Filipino
seafarers wherein the parties are covered by a collective bargaining agreement, the dispute or claim should be
submitted to the jurisdiction of a voluntary arbitrator or panel of arbitrators. It is only in the absence of a collective
bargaining agreement that parties may opt to submit the dispute to either the NLRC or to voluntary arbitration.
34
Primero
Borlas
G.R. No. 72644 December 14, 1987
ALFREDO F. PRIMERO, petitioner, vs.INTERMEDIATE APPELLATE COURT and DM TRANSIT, respondents.
NARVASA, J.:
Facts: Petitioner Primero was discharged, for no reason or cause was given, from his employment as bus driver of
DM Transit Corporation (DM) after having been employed therein for over 6 years. For 23 days, he was given a
run-around from one management official to another, pleading that he be allowed to work as his family was in dire
need of money and at the same time inquiring (why) he was not allowed to work or drive a bus of the company
however got negative results and given cold treatment. He was advised by Munoz, Jr., Corporate President, that he
18

will be given financial assistance only when he will sue them in court and lose. He was advised to seek employment
with other bus firms. DM, in bad faith and with malice, persuaded other firms (California Transit, Pascual Lines, De
Dios Transit, Negrita Corporation, and MD Transit) not to employ Primero in any capacity after he was already
unjustly dismissed by said defendant. Primero instituted proceedings against DM with the Labor Arbiters of the
Department of Labor for illegal dismissal. Labor Arbiter rendered judgment ordering DM to pay complainant
separation. The judgment was affirmed by the National Labor Relations Commission and later by the Secretary of
Labor. Three months afterwards, Primero brought suit against DM in the Court of First Instance of Rizal seeking
recovery of damages caused not only by the breach of his employment contract, but also by the oppressive and
inhuman, and consequently tortious, acts of his employer and its officers antecedent and subsequent to his
dismissal from employment without just cause. Trial Court dismissed the complaint on the ground of lack of
jurisdiction, for the reason that at the time that the complaint was filed on August 17, 1978, the law the Labor
Code as amended by PD 1367, eff. May 1, 1978 conferred exclusive, original jurisdiction over claims for moral or
other damages, not on ordinary courts, but on Labor Arbiters. IAC affirmed said decision, hence this petition. The
decision was reached by a vote of 3 to 2. According to the dissenters, existence of employment relations was not
alone decisive of the issue of jurisdiction, and that such relations may indeed give rise to "civil" as distinguished
from purely labor disputes, as where an employer's right to dismiss his employee is exercised tortiously, in a
manner oppressive to labor, contrary to morals, good customs or public policy. Primero has appealed to us from
this judgment of the IAC praying that we overturn the majority view and sustain the dissent.
Issue: Whether Labor Arbiters have jurisdiction over claims for damages?
Ruling: The legislative intent appears clear to allow recovery in proceedings before Labor Arbiters of moral and
other forms of damages, in all cases or matters arising from employer-employee relations. This would no doubt
include, particularly, instances where an employee has been unlawfully dismissed. In such a case the Labor Arbiter
has jurisdiction to award to the dismissed employee not only the reliefs specifically provided by labor laws, but also
moral and other forms of damages governed by the Civil Code. Moral damages would be recoverable, for example,
where the dismissal of the employee was not only effected without authorized cause and/or due process for which
relief is granted by the Labor Code but 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 for which the obtainable relief
is determined by the Civil Code (not the Labor Code).
35
PNB
Gubantes
PNB vs Florence Cabansag
Jurisdiction of LA and NLRC as to a tourist employee hired in Singapore but worked for PNB Singapore Branch
Florence Cabansag arrived in Singapore as a tourist. She applied for employment with the Singapore Branch of the
PNB, organized and existing under the laws of the Philippines. The Branch Office had two types of employees: a)
expatriates or the regular employees, hired in Manila and assigned abroad and b) locally (direct) hired. VicePresident of the PNB offered her a temporary appointment as Credit Officer with several conditions which Florence
accepted. The Philippine Embassy in Singapore processed the employment contract of Florence and was issued by
the POEA an Overseas Employment Certificate certifying she was a bona fide contract worker for Singapore. After 3
months, Florence was asked to resign as a cost-cutting measure of the Bank. She was warned that unless she
submitted her letter of resignation, her employment record will be blemished with the notation DISMISSED. The
LA rendered judgment in favor of the complainant finding the Bank guilty of illegal dismissal and devoid of due
process. NLRC and CA affirmed this decision and stated that even though respondent secured an employment pass
from the Singapore Ministry of Employment, she did not waive Philippine labor laws, or the jurisdiction of the
labor arbiter or the NLRC over her complaint for illegal dismissal.
ISSUE
WON the LA and NLRC has jurisdiction over a tourist employee hired in a foreign country but worked for PNB
Singapore branch
RULING
Yes. Based on the provisions of Art. 217 of the LC, and Sec.10 of RA 8042, labor arbiters clearly have original and
exclusive jurisdiction over claims arising from EE, including termination disputes involving all workers, among
whom are overseas Filipino workers. Securing the employment pass from the Singaporean Ministry of Manpower
does not automatically mean that the non-citizen is thereby bound by local laws only. It does not at all imply a
waiver of one's national laws on labor. Noteworthy is the fact that respondent likewise applied for and secured an
Overseas Employment Certificate from the POEA through the Phil. Embassy in Singapore. Under our law, this
document authorized her working status in a foreign country and entitled her to all benefits and processes under
our statutes.
36
Santiago
Jimenez
Santiago v. CF Sharp Crew Management, Inc.
GR No. 162419, July 10, 2007 ( Jurisdiction over money claims of OFWs even without employment contract)
19

Facts:
Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about five (5) years. He
signed a new contract of employment with the duration of 9 months on Feb 3 1998 and he was to be deployed 10
days after. This contract was approved by POEA. A week before the date of departure, the respondent received a
phone call from petitioners wife and some unknown callers asking not to send the latter off because if allowed, he
will
jump
ship
in
Canada.
Because of the said information, petitioner was told that he would not be leaving for Canada anymore. This
prompted him to file a complaint for illegal dismissal against the respondent. The LA held the latter responsible.
On appeal, the NLRC ruled that there is no employer-employee relationship between petitioner and respondent,
hence, the claims should be dismissed. The CA agreed with the NLRCs finding that since petitioner had not
departed from the Port of Manila, no employer-employee relationship between the parties arose and any claim for
damages against the so-called employer could have no leg to stand on.
Issue:
Whether the seafarer, who was prevented from leaving the port of Manila and refused deployment without valid
reason but whose POEA approved employment contract provides that EER shall commence only upon the seafarers
actual departure from the port in the point of hiring is entitled to relief
Ruling:
Yes. Despite the absence of an employer-employee relationship between petitioner and respondent, the Court rules
that the NLRC has jurisdiction over petitioners complaint. The jurisdiction of labor arbiters is not limited to claims
arising from employer-employee relationships. Section 10 of R.A. No. 8042 (Migrant Workers Act), provides that:
Sec. 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within
ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages. x x x [Emphasis supplied]
Since the present petition involves the employment contract entered into by petitioner for overseas employment,
his claims are cognizable by the labor arbiters of the NLRC.
37
Medline
Jurado
Medline Management Inc. V. Roslinda
GR 168715. Sept. 15,10
Ponenten. Del Castillo
Facts. Petitioner was a shipping agency. Then, Roslinda was hired to work abroad as an oiler. The respondent,
after his repatriation, consulted a doctor due to his distended abdomen which eventually found out that he was
suffering from renal failure and must undergo a hemodialysis, which method of removing waste products in the
blood
when
the
kidneys
are
in
renal
failure.
Unfortunately, Roslinda died. His heir filed a complaint against petitioner for payment of death and medical
compensation before the Labor Arbiter. However, petitioner contended that the Labor Arbiter has no jurisdiction
because
there
exist
EmployerEmployee
Relationship
between
them.
Issue. Whether the contention of the petitioner is meritorious?
Held. Yes. Roslinda did not die while he was under the employ of petitioners. His contract of employment ceased
after having completed his contract thereat. He died a year after the expiration of his contract. Thus, his
beneficiaries are not entitled to the death benefits under the Standard Employment Contract for Seafarers.
Moreover, there is no evidence to show that Julianos illness was acquired during the term of his
employment with petitioners. In respondents Position Paper, they admitted that Juliano was discharged not
because of any illness but due to the expiration of his employment contract. Instead, what respondents presented
were the Medical Certificates issued by Dr. Lloren attesting to the fact that on March 6, 2000, Juliano consulted her
complaining of abdominal distention. We find this not substantial evidence to prove that Julianos illness which
caused his death was contracted during the term of his contract.[29] Indeed, the death of a seaman several
months after his repatriation for illness does not necessarily mean that: a) the seaman died of the same illness; b)
his working conditions increased the risk of contracting the illness which caused his death; and c) the death is
compensable, unless there is some reasonable basis to support otherwise.[30] In the instant case, Juliano was
repatriated not because of any illness but because his contract of employment expired. There is likewise no proof
that he contracted his illness during the term of his employment or that his working conditions increased the risk of
contracting the illness which caused his death.
38
Ace
Otsuka
20

39
WPP
WPP Communications v. Galera
GR. no. 169207 Mar. 25, 2010
Carpio, Acting CJ .:
Piedad
Facts: Jocelyn Galera is an American Citizen recruited by the WPP chairman to work in the Philippines. They
signed the contract providing for the benefits of housing and full maintenance of the company car. She was
designated as Vice President for WPP but on the following year, she was advised that her services were terminated.
Galera filed a complaint for illegal dismissal plus the benefits accorded her as an employee. The Labor Arbiter ruled
in favor of Galera but was reversed by the NLRC in lieu of her being a corporate officer and subject to the SEC rules.
Issue:
Whether
or
not
Galera
is
an
employee
or
corporate
officer
Ruling: She is an employee. Thus, this case is subject to the jurisdiction of the NLRC and the Labor Arbiter.
Corporate officers are given such character either by a corporation Code or by the corporations by-laws. Under
Sec. 25 of the Corporate Code, te corporate officers are the president, secretary and other officers as may be
provided by the by-laws. Other officers are sometimes created by the charter or by-laws of a corporation, or the
board of directors may be empowered under the by-laws to create additional offices as may be necessary.
In this case, it is found out that by the corporate by laws, only one Vice President position is created which is taken
and unamended during Galeras employment. Hence, with no corporate office to speak of but there is a valid
employment, Galera is an employee of the corporation.
40
Galera
Rigor
WPP VS. GALERA
G.R. NO. 169207
GALERA VS. WPP
G.R. NO. 169239
MARCH 25, 2010
CARPIO, Acting C.J.:
FACTS:
Petitioner is Jocelyn Galera, an American citizen who was recruited from the US by private respondent John
Steedman, Chairman-WPP Worldwide and Chief Executive Officer of Mindshare, Co., a corporation based in Hong
Kong, China, to work in the Philippines for private respondent WPP Marketing Communications, Inc. (WPP). On
December 14, 2000, GALERA alleged she was verbally notified by private STEEDMAN that her services had been
terminated from private respondent WPP. A termination letter followed the next day. On 3 January 2001, Galera
filed a complaint for illegal dismissal, holiday pay, service incentive leave pay, 13th month pay, incentive plan,
actual and moral damages, and attorney's fees against WPP and/or John Steedman (Steedman), Mark Webster
(Webster) and Nominada Lansang (Lansang). The Labor Arbiter's Ruling for illegal dismissal and damages in favor
of GALERA. The First Division of the NLRC reversed the ruling of Arbiter Madriaga. Yet it was reversed again by
CA.
ISSUE:
Whether Galera is an Employee or a Corporate Officer?
RULING: EMPLOYEE.
Galera, on the belief that she is an employee, filed her complaint before the Labor Arbiter. On the other hand, WPP,
Steedman, Webster and Lansang contend that Galera is a corporate officer; hence, any controversy regarding her
dismissal is under the jurisdiction of the Regional Trial Court. We agree with Galera. Corporate officers are given
such character either by the Corporation Code or by the corporation's by-laws. Galera's appointment as a corporate
officer (Vice-President with the operational title of Managing Director of Mindshare) during a special meeting of
WPP's Board of Directors is an appointment to a non-existent corporate office. At the time of Galera's appointment,
WPP already had one Vice-President in the person of Webster and all five directorship positions provided in the bylaws are already occupied. Another indicator that she was a regular employee and not a corporate officer is Section
14 of the contract, which clearly states that she is a permanent employee not a Vice-President or a member of the
Board of Directors. Another convincing indication that she was only a regular employee and not a corporate officer
is the disciplinary procedure, which states that her right of redress is through Mindshare's Chief Executive Officer
for the Asia-Pacific. This implies that she was not under the disciplinary control of private respondent WPP's Board
of Directors (BOD), which should have been the case if in fact she was a corporate officer because only the Board of
Directors
could
appoint
and
terminate
such
a
corporate
officer.
21

WPP's dismissal of Galera lacked both substantive and procedural due process. Apart from Steedman's letter dated
15 December 2000 to Galera, WPP failed to prove any just or authorized cause for Galera's dismissal. Steedman's
letter to Galera reads: The operations are currently in a shamble. There is lack of leadership and confidence in your
abilities from within, our agency partners and some clients. Most of the staff I spoke with felt they got more
guidance and direction from Minda than yourself. In your role as Managing Director, that is just not acceptable. I
believe your priorities are mismanaged. The recent situation where you felt an internal strategy meeting was more
important than a new business pitch is a good example. You failed to lead and advise on the two new business
pitches. In both cases, those involved sort (sic) Minda's input. As I discussed with you back in July, my directive
was for you to lead and review all business pitches. It is obvious [that] confusion existed internally right up until the
day of the pitch. The quality output is still not to an acceptable standard, which was also part of my directive that
you needed to focus on back in July. I do not believe you understand the basic skills and industry knowledge
required to run a media special operation.
WPP, Steedman, Webster, and Lansang, however, failed to substantiate the allegations in Steedman's letter. Galera,
on the other hand, presented documentary evidence 22 in the form of congratulatory letters, including one from
Steedman, which contents are diametrically opposed to the 15 December 2000 letter. The law further requires that
the employer must furnish the worker sought to be dismissed with two written notices before termination of
employment can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for
which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employer's decision
to dismiss him. Failure to comply with the requirements taints the dismissal with illegality. 23 WPP's acts clearly
show that Galera's dismissal did not comply with the two-notice rule.
41
MAtling
Valera
MATLING INDUSTRIAL V COROS
FACTS:
Coros was dismissed by the petitioner as Vice President for Finance and Administration and former filed for illegal
suspension and illegal dismissal against Matling and some of its corporate officers in the NLRC. Petitioners moved
to dismiss the complaint contending that the same pertained to the jurisdiction of the SEC due to controversy being
intra-corporate inasmuch as the respondent was am member of Matlings board of directors aside from its VP for
finance and administration prior to its termination.
ISSUE: Whether the respondent was a corporate officer of the petitioner.
Whether the LA or RTC had jurisdiction over the complaint for illegal dismissal.
RULING:
LA: Granted petitioners motion to dismiss ruling that the respondent was a corporate officer because he was
occupying the position of VP for finance and administration and at the same time a member of the board of
directors of Matling.
NLRC: Set aside the dismissal concluding that the respondents complaint for illegal dismissal was properly
cognizable by the LA not by SEC because he was not a corporate officer by virtue of his position in Matling, albeit
high ranking and managerial, not being among the positions listed in Matlings comstitution and by-laws.
CA: dismissed the petition for certiorari. The position for VP for admin and finance which Coros used to hold was
not created by the corporations board of directors but only by its president or executive VP pursuant to the by-laws
of their corporation. Coros illegal dismissal is within the jurisdiction of LA.
SC: denied the petition for review and affirm the decision of the CA.
Conformably with the sec 25, a position must be expressly mentioned by the by-laws in order to be considered as a
corporate office. Thus, the election of an office pursuant to or under the by-law enabling provision is not enough to
make the position a corporate office. The rest of the corporate offices could be considered only as employees or
subordinate
officials.
In order to determine whether a dispute constitutes an intra-corporate controversy or not, the court considers the
elements: (1) the status or relationship of the parties; (2) the nature of the question that is the subject of their
controversy.
42
Locsin
Abad
Case title Locsin v. Nissan Car Lease Phils, Inc.
GR number 185567
Date 20 October 2010
Ponente - BRION, J
Facts - Locsin was elected Executive Vice President and Treasurer (EVP/Treasurer) of NCLPI. A little over 7
22

months after his election as Chairman of the Board, the NCLPI Board held a special meeting and one of the items of
the agenda was the election of a new set of officers. Unfortunately, Locsin was neither re-elected Chairman nor
reinstated
to
his
previous
position
as
EVP/Treasurer.
Aggrieved, Locsin filed a complaint for illegal dismissal with prayer for reinstatement, payment of backwages,
damages and attorneys fees before the Labor Arbiter against NCLPI and Banson, who was then President of
NCLPI.
NCLPI and Banson filed a Motion to Dismiss,on the ground that the Labor Arbiter did not have jurisdiction over
the case since the issue of Locsins removal as EVP/Treasurer involves an intra-corporate dispute.
LA issued an Order denying the Motion to Dismiss, holding that her office acquired jurisdiction to arbitrate and/or
decide the instant complaint finding extant in the case an employer-employee relationship. This was reversed by
the CA ruling that Locsin was a corporate officer; the issue of his removal as EVP/Treasurer is an intra-corporate
dispute
under
the
RTCs
jurisdiction
Issue whether the removal of Locsin is an intra-corporate dispute and thus , does not fall under jurisdiction of LA
Ruling - CA correctly ruled that no employer-employee relationship exists between Locsin and Nissan.
Locsin was undeniably Chairman and President, and was elected to these positions by the Nissan board
pursuant to its By-laws. As such, he was a corporate officer, not an employee. The CA reached this conclusion by
relying on the submitted facts and on Presidential Decree 902-A, which defines corporate officers as those officers
of a corporation who are given that character either by the Corporation Code or by the corporations by-laws.
Likewise, Section 25 of Batas Pambansa Blg. 69, or the Corporation Code of the Philippines (Corporation Code)
provides that corporate officers are the president, secretary, treasurer and such other officers as may be provided
for
in
the
by-laws.
Even as Executive Vice-President/Treasurer, Locsin already acted as a corporate officer because the position of
Executive Vice-President/Treasurer is provided for in Nissans By-Laws. In this case, Locsin was elected by the
NCLPI
Board,
in
accordance
with
the
Amended
By-Laws
of
the
corporation
Given Locsins status as a corporate officer, the RTC, not the Labor Arbiter or the NLRC, has jurisdiction to hear the
legality of the termination of his relationship with Nissan. As held in Okol, a corporate officers dismissal from
service is an intra-corporate dispute: In a number of cases it was held that a corporate officers dismissal is always a
corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation.
43
Renato
Abella
Renato Real v. Sangu Philippines, Inc.
GR No. 168757, January 19, 2011
Del Castillo, J.
Facts: Renato Real was the Manager of respondent corporation Sangu Philippines, Inc. which is engaged in the
business of providing manpower for general services. He filed a complaint for illegal dismissal against the
respondents stating that he was neither notified of the Board meeting during which his removal was discussed nor
was
he
formally
charged
with
any
infraction.
Respondents, on the other hand, said that Real committed gross acts of misconduct detrimental to the company
since 2000. The LA declared petitioner as having been illegally dismissed. Sangu appealed to NLRC and established
petitioners status as a stockholder and as a corporate officer and hence, his action against respondent corporation
is an intra-corporate controversy over which the Labor Arbiter has no jurisdiction. NLRC modified the LAs
decision.
On
appeal,
the
CA
affirmed
the
decision
of
NLRC.
Issue:
Whether
Reals
complaint
for
illegal
dismissal
constitutes
an
intra-corporate
controversy.
Ruling: No. The case does not involve an intra-corporate controversy. Not all conflicts between the stockholders
and the corporation are classified as intra-corporate. There are other factors to consider in determining whether the
dispute involves corporate matters as to consider them as intra-corporate controversies.
To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the
branches of the RTC specifically designated by the Court to try and decide such cases, two elements must concur:
(a) the status or relationship of the parties, and (2) the nature of the question that is the subject of their
controversy.
The first element requires that the controversy must arise out of intra-corporate or partnership relations between
any or all of the parties and the corporation. The second element requires that the dispute among the parties be
intrinsically connected with the regulation of the corporation. If the nature of the controversy involves matters that
23

are purely civil in character, necessarily, the case does not involve an intra-corporate controversy.
44
Prudential
G.R. No. 141093. February 20, 2001
PRUDENTIAL BANK and TRUST
GONZAGA-REYES, J.:
Borlas
COMPANY,
petitioner,
vs.
CLARITA
T.
REYES,
respondent.
Facts: Clarita Tan Reyes was appointed Accounting Clerk by Prudential Bank and Trust Company (bank) and rose
to become supervisor. She was appointed Assistant Vice-President in the foreign department of the Bank, tasked
with the duties, among others, to collect checks drawn against overseas banks payable in foreign currency and to
ensure the collection of foreign bills or checks purchased, including the signing of transmittal letters covering the
same, until her illegal dismissal. Her length of service with the bank was equivalent to 28 years. The auditors of the
Bank discovered that two checks, received by the Bank were not sent out for collection to Hong Kong Shanghai
Banking Corporation (HSBC) on her order until the said checks became stale. After thorough investigation, the
Board has resolved not to re-elect her position here services were terminated. She filed a complaint for illegal
suspension and illegal dismissal and alleged that alleged that the real reason for her dismissal was her filing of the
criminal cases against the bank president, the vice president and the auditors of the Bank, such filing not being a
valid ground for her dismissal. LA ruled in favor of Reyes however NLRC reversed the said decision and ruled that
dismissal was valid. CA reinstated LAs decision hence this petition. The bank argued that the dispute is an intracorporate controversy as it does the non-election of private respondent to the position of Assistant Vice-President
of the Bank which falls under the exclusive and original jurisdiction of the Securities and Exchange Commission
(now
the Regional Trial Court)
under Section 5
of Presidential Decree No.
902-A.
Issue: Whether the dispute is an intra-corporate controversy?
Ruling: The banks contention that she merely holds an elective position and that in effect she is not a regular
employee is belied by the nature of her work and her length of service with the Bank. It has been stated that the
primary standard of determining regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or business of the employer. Additionally, an employee is
regular because of the nature of work and the length of service, not because of the mode or even the reason for
hiring them. As Assistant Vice-President of the Foreign Department of the Bank she performs tasks integral to the
operations of the bank and her length of service with the bank totaling 28 years speaks volumes of her status as a
regular employee of the bank. In fine, as a regular employee, she is entitled to security of tenure; that is, her
services
may
be
terminated
only
for
a
just
or
authorized
cause.
Petitioner Bank can no longer raise the issue of jurisdiction under the principle of estoppel. The Bank participated
in the proceedings from start to finish. It was only when the Court of Appeals ruled in favor of private respondent
did it raise the issue of jurisdiction. The Bank actively participated in the proceedings before the Labor Arbiter, the
NLRC and the Court of Appeals. . Hence, a party may be estopped or barred from raising the question of
jurisdiction for the first time in a petition before the Supreme Court when it failed to do so in the early stages of the
proceedings.
45
Rural
Gubantes
Rural Bank of Coron vs Cortes
A corporate officer may also be an employee whose dismissal may vest jurisdiction on the LA
FACTS
Annalisa Cortes was hired as the Corporate Secretary and Personnel Officer of the Rural Bank of Coron, and a
Personnel Officer of both Empire Cold Storage and Development Corporation, and Citizens Development Inc. Upon
inspection of the books of the said corporations where Annalisa was hired as a personnel officer, it was discovered
that the latter was involved in several anomalies, prompting them to terminate her services from the corporations.
Annalisa stated her willingness to abide the decision regarding her termination but stressed her right to separation
pay. When her demand went unheeded, she filed a complaint for illegal dismissal and non-payment of salaries and
other benefits. The petitioners moved for the dismissal of the complaint on the ground that it was an intracorporate controversy involving the removal of a corporate officer. The LA found that Annalisa was not a corporate
officer, and thus the case falls within the ambit of the jurisdiction of the LA.
ISSUE
WON Cortes is a corporate officer of the said corporations.
RULING
No. While Cortes was the Corporate Secretary of the Rural Bank of Coron, she was also its Financial Assistant and
the Personnel Officer of the two other petitioner corporations. Jurisprudence instructs that a corporation can
engage its corporate officers to perform services under a circumstance which would make them employees. The
Labor Arbiter has thus jurisdiction over Cortes' complaint.
46
Feliciano
Jimenez
24

Feliciano v. Commission on Audit
GR
No.
1474202,
January
14,
2004
(issues
involving
GOCCs
and
its
employees)
Facts:
COA assessed Leyte Metropolitan Water District (LMWD) auditing fees. Petitioner Feliciano, as General Manager
of LMWD, contended that the water district could not pay the said fees on the basis of Sections 6 and 20 of P.D. No.
198 as well as Section 18 of R.A. No. 6758. He primarily claimed that LMWD is a private corporation not covered by
COA's jurisdiction. Petitioner also asked for refund of all auditing fees LMWD previously paid to COA. COA
Chairman denied petitioners requests. Petitioner filed a motion for reconsideration which COA denied. Hence, this
petition.
Issue: Whether a Local Water District (LWD) created under PD 198, as amended, is a government-owned or
controlled corporation subject to the audit jurisdiction of COA or a private corporation which is outside of COAs
audit jurisdiction.
Ruling:
Petition lacks merit. The Constitution under Sec. 2(1), Article IX-D and existing laws mandate COA to audit all
government agencies, including government-owned and controlled corporations with original charters. An LWD is
a GOCC with an original charter. The COA audit jurisdiction extends not only to government agencies or
instrumentalities but also to government owned and controlled corporation with original charters as well as
other government-owned or controlled corporations wthout original charters.
The determining factor of COAs audit jurisdiction is government ownership or control of the corporation.
47
Luzviminda
Jurado
Luzviminda Ang V. PNB
GR 178762. June 16,10
Ponente. Abad
Facts PNB, then a GOCC, hired Ang as a probationary clerk, eventually became an Asst. Manger. When the PNB
was privatized, she was deemd automatically retired. But the PNB re- employed her and assigned her in
Tuguegarao. Subsequently, PNB administratively charged her with serious misconduct and willful breach of trust
for taking part in a scam called " kiting operwtion. " where a depositor used a conduit account for depositing several
unfunded checks drawn against the same depositor's other current accounts and from which the conduit bank
account he later withdrew those checks. Ang contended that the bank did not suffer loss and alos pointed out that
th causes for her terminationtook place when she was yet a government official, that the PNB had ceased to be
government owned.
Issue. whether the contetion of Ang is meritorious?
Held. No. When PNB began as a Government Corporation, it did not mean that its corporate being ceased, and
was subsequently re-established when it was privatized.
It remained th same corporate entity before, during, and after the change over with no break in its life as a
corporation. The offenses that Ang committed against the bank before its privatization continued to be offenses
against the bank after privatization.
48
Casino
Casino labor ASSOCIATION vs. CA,PCOC and PSSC
Ponente: PUNO C.J.:
JURISDICTION ON GOCC DISMISSAL CASE
Otsuka
Facts: On July 20, 1987, the Labor Arbiter dismissed the consolidated cases for lack of jurisdiction as well as the
NLRC as the same over PAGCOR , PCOC and PSSC. The petitioner filed a motion for review on certiorari to the CA
which was denied, the same with the petition for reconsideration filed by the petitioner with finality dated March
15,
1989
Resolution
.
The resolution in part states:
xxx Any petitions brought against private companies will have to be brought before the appropriate agency or
office
of
the
of
the
Department
of
Labor
and
Employment.
Petitioner filed a manifestation/ motion that the records of the case be remanded to the Arbitration Branch for
proper prosecution and disposition thereof which was granted on 30th of June 1989 for further proceedings. The
petitioner appeals via certiorari on the grounds that NLRC committed grave abuse of discretion.
Issue:
Whether
the
NLRC
have
jurisdiction
over
the
E-ER
REL
problems
over
GOCC.
Held: NO. the NLRC has no jurisdiction over PAGCOR, PCOC and PSSC. In accordance with the Constitution and
25

jurisprudence, corporations with original charter fall under the jurisdiction of the Civil Service Commission and
not the Labor Department.
The petition was dismissed and the decision of the CA was affirmed.
49
Postigo
Piedad
Postigo v. Philippine Tuberculosis
GR.no. 155146 Jan.24, 2006
QUISUMBING, J.:
Facts: Petitioners Dr. Perla A. Postigo, et al., were regular employees of the respondent Philippine Tuberculosis
Society, Inc. (PTSI). Upon retirement from service, some of the petitioners who were compulsory members of the
Government Service Insurance System (GSIS) obtained retirement benefits from the GSIS. At the time the
petitioners retired, Article 287 of the Labor Code had been amended by Republic Act No. 7641. Rep. Act No. 7641
granted retirement pay to qualified employees in the private sector, in the absence of any retirement plan or
agreement with the company. As the respondent did not have a retirement plan for its employees, aside from its
contribution to the GSIS, petitioners claimed from the respondent their retirement benefits under Rep. Act No.
7641. The respondent denied their claims on the ground that the accommodation extended by the GSIS to the
petitioners removed them from the coverage of the law. When they consulted the Bureau of Working Conditions, it
opined that they are entitled with such benefits. Despite this, respondent refused to give them the benefits. The
petitioners filed a complaint with the Labor Arbiter.
Issue:
Whether
or
not
Petitioners
are
entitled
to
the
benefits
of
the
Retirement
Pay
Law.
Ruling: Yes. The respondent was incorporated as a non-profit, benevolent and non-stock corporation under the
Corporation Code. Having been created under the general corporation law instead of a special charter, we hold that
the
respondent
is
a
private
and
not
a
governmental
corporation.
The Philippine Tuberculosis Society, Inc. (PTSI) belongs to the latter category and, therefore, covered by Rep. Act
No. 7641 which is an amendment to the Labor Code. Extant on the records is the respondents admission that
although its employees are compulsory members of the GSIS, said employees are not governed by the Civil Service
Law. If the respondent is truly a government-owned or controlled corporation, and petitioners are employees in
the public sector, then, they should have been covered by said law. The truth, however, is that, the respondent is a
non-profit but private corporation organized under the Corporation Code, and the petitioners are covered by the
Labor Code and not by the Civil Service Law.
Employees of government-owned and controlled corporations with special charters are covered under the Civil
Service. On the other hand, employees of government-owned and controlled corporations under the Corporation
Code are governed by the provisions of the Labor Code.
50
Camporedondo
Rigor
BALTAZAR CAMPOREDONDO VS. NLRC
G.R.
NO.
129049
AUGUST
6,
1999
PARDO, J.:
FACTS:
Petitioner was employed with the Philippine National Red Cross (PNRC) since 1980, and until his early
retirement on December 15, 1995, he was administrator of the Surigao del Norte Chapter, Philippine National
Red Cross. Then field auditor of the PNRC conducted an audit of the books of account of the Surigao del Norte
Chapter headed by petitioner and found him short in the total sum of P109,000.00. Dr. Celso Samson, Secretary
General of the PNRC wrote petitioner requiring him to restitute within seventy two hours from notice, the total sum
of P135,927.78 representing cash shortage, technical shortage and unremitted collections. Upon filing his early
retirement he wrote a letter to Dr. Samson requesting for a re-audit by an independent auditor of his accounts.
However, Dr. Samson denied the request. Because of denying his request petitioner filed with the National Labor
Relations Commission complaint for illegal dismissal, damages and underpayment of wages against the Philippine
National Red Cross and its key officials. Respondent Philippine National Red Cross filed with the Surigao del Norte
provincial office, Department of Labor and Employment, a motion to dismiss the complaint for lack of jurisdiction
over the subject matter of the case because the PNRC is a government corporation whose employees are members
of the Government Service Insurance System, and embraced within the Civil Service Law and regulations.
Petitioner filed an opposition to motion to dismiss arguing that there was between the PNRC and its duly appointed
paid staff, an employer-employee relationship, governed by the Labor Code of the Philippines. The Labor Arbiter
issued an order dismissing the complaint for lack of jurisdiction, finding that the Philippine National Red Cross is a
government corporation with an original charter, having been created by Republic Act No. 95. Petitioner filed an
appeal but the NLRC denied the petition and upheld Labor arbiters decision that dismissed petitioners complaint
for lack of jurisdiction.
ISSUE: Whether the Philippine National Red Cross is a government owned and controlled corporation or it has
26

been impliedly converted to a private organization subject to the jurisdiction of labor tribunals in a complaint
filed by petitioner?
RULING: NO.
Resolving the issue set out in the opening paragraph of this opinion, we rule that the Philippine National Red Cross
(PNRC) is a government owned and controlled corporation, with an original charter under Republic Act No. 95, as
amended. The test to determine whether a corporation is government owned or controlled or private in nature is
simple. Is it created by its own charter for the exercise of a public function, or by incorporation under the general
corporation law? Those with special charters are government corporations subject to its provisions, and its
employees are under the jurisdiction of the Civil Service Commission, and are compulsory members of the
Government Service Insurance System. The PNRC was not impliedly converted to a private corporation simply
because its charter was amended to vest in it the authority to secure loans, be exempted from payment of all duties,
taxes, fees and other charges of all kinds on all importations and purchases for its exclusive use, on donations for its
disaster relief work and other services and in its benefits and fund raising drives, and be allotted one lottery draw a
year by the Philippine Charity Sweepstakes Office for the support of its disaster relief operation in addition to its
existing lottery draws for blood program.
Having served in the Philippine National Red Cross for a number of years since his initial employment, he must
know that it is a government corporation with its own charter and that he was covered by compulsory membership
in the Government Service Insurance System, which is why he could apply, as he did, for early retirement from
the service under Presidential Decree No. 1146 or Republic Act No. 1616.
51
Trade
Valera
TRADE UNIONS V NATIONAL HOUSING
FACTS:
Trade unions of the Phils and Allied (TUPAS) was a legitimate organization with a chapter in NHC. TUPAS filed a
petition for the conduct of a certification election to determine the exclusive bargaining representative of workers of
NHC but was denied. The reason for this is because being a govt-owned or controlled corporation its employees
are prohibited to form, join, or assist any labor organization for purposes of collective bargaining pursuant to Sec 1,
Rule II, Book V of the Rules and Regulations Implementing the Labor Code.
TUPAS appealed to the Bureau of Labor Relations reversing the dismissal and ordering the holding of a
certification election. This decision was later set aside upon motion for reconsideration of respondent NHC. Hence
this petition.
ISSUE:
Whether the employees of NC may conduct a certification election.
RULING:
Yes. The rule was modified in the 1987 Constitution, the corresponding provision whereof declares the civil service
embraces all branches, subdivisions, instrumentalities, and agencies of the government, including government
owned
or
controlled
corporations
WITH
ORIGINAL
CHARTERS.
There is therefore, no impediment to the holding of the election among the workers of the NHC for it is clear that
they are covered by the Labor Code, the NHC being a government controlled corporation without an original
charter.
52
Hugo
Abad
Case title Hugo v. LRTA
GR number 181866
Date 18 March 2010
Ponente
Facts - Respondent Light Rail Transit Authority (LRTA), a government-owned and controlled corporation,
constructed a light rail transit system which traverses from Baclaran in Paraaque City to Monumento in Kalookan
City. To effectively carry out its mandate, LRTA entered into a ten-year Agreement for the Management and
Operation
of
the
Metro
Manila
Light
Rail
Transit
System.
METRO thus hired its own employees including herein petitioners-members of the Pinag-isang Lakas ng
Manggagawa sa METRO, Inc.-National Federation of Labor, otherwise known as PIGLAS-METRO, INC.-NFLKMU (the Union), the certified exclusive collective bargaining representative of METROs rank-and-file employees.
On account of a deadlock in the negotiation for the forging of a new collective bargaining agreement between
METRO and the Union, petitioners filed a Notice of Strike. Then Secretary of Labor directed the striking employees
including herein petitioners to immediately return to work and METRO to accept them back under the same terms
and conditions of employment prevailing prior to the strike. By LRTAs claim, the striking employees including
petitioners defied the return-to-work order.
27

When the Agreement expired,LRTA did not renew it. It instead took over the management and operations of the
light rail transit system, hiring new personnel for the purpose. METRO thus considered the employment of all its
personnel terminated.
Petitioners then filed a complaint for illegal dismissal and unfair labor practice with prayer for reinstatement and
damages against METRO and LRTA. LRTA filed a motion to dismiss on the ground that the Labor Arbiter and the
NLRC have no jurisdiction over it, for, by petitioners own admission, there was no employer-employee relationship
between
it
and
petitioners.
Issue
whether
the
LA
and/or
the
NLRC
has
jurisdiction
over
the
case.
Ruling - The Labor Arbiter and the NLRC do not have jurisdiction over LRTA. Petitioners themselves admitted in
their complaint that LRTA is a government agency organized and existing pursuant to an original charter
(Executive Order No. 603), and that they are employees of METRO. Light Rail Transit Authority v. Venus, Jr., 485
SCRA 361 (2006), which has a similar factual backdrop, holds that LRTA, being a government-owned or controlled
corporation created by an original charter, is beyond the reach of the Department of Labor and Employment which
has jurisdiction over workers in the private sector, viz:
. . . [E]mployees of petitioner METRO cannot be considered as employees of petitioner LRTA. The employees hired
by METRO are covered by the Labor Code and are under the jurisdiction of the Department of Labor and
Employment, whereas the employees of petitioner LRTA, a government-owned and controlled corporation with
original charter, are covered by civil service rules. Herein private respondent workers cannot have the best of two
worlds, e.g., be considered government employees of petitioner LRTA, yet allowed to strike as private employees
under our labor laws. x x x.
53
Pakistan
Abella
Pakistan International Airlines Corp. v. Ople
GR No. 61594, September 28, 1990
Feliciano, J.
Facts: Pakistan International Airlines Corporation (PIA), a foreign corporation, executed in Manila two separate
contracts of employment with private respondents, Farrales and Mamasig. The contract provides the following:
5. DURATION OF EMPLOYMENT AND PENALTY
This agreement is for a period of 3 years, but can be extended by the mutual consent of the parties.
6. TERMINATION
Notwithstanding anything to contrary as herein provided, PIA reserves the right to terminate this agreement at any
time by giving the EMPLOYEE notice in writing in advance one month before the intended termination or in lieu
thereof,
by
paying
the
EMPLOYEE
wages
equivalent
to
one
months
salary.
10. APPLICABLE LAW
This agreement shall be construed and governed under and by the laws of Pakistan, and only the Courts of Karachi,
Pakistan shall have the jurisdiction to consider any matter arising out of or under this agreement.
Private respondents were hired as flight attendants after undergoing training. Sometime prior to the expiration of
the contracts of employment, PIA sent separate letters informing them that they will be terminated. Private
respondents jointly instituted a complaint for illegal dismissal and non-payment of company benefits and bonuses
against PIA with the Ministry of Labor and Employment. PIA claimed that the services of both private respondents
were terminated pursuant to the provisions of the employment contract. Private respondents had a favourable
decision stating that private respondents had attained the status of regular employees after they had rendered more
than a year of continued service; that the stipulation limiting the period of the employment contract to 3 years was
null and void as violative of the provisions of the Labor Code and its implementing rules and regulations on regular
and casual employment; and that the dismissal, having been carried out without the requisite clearance from the
MOLE, was illegal. The decision was sustained on appeal.
Issue: Whether Pakistan law should be applied in the case as provided in the contract.
Ruling: The Sc held that PIA cannot take refuge in paragraph 10 of its employment agreement which specifies,
firstly, the law of Pakistan as the applicable law of the agreement and, secondly, lays the venue for settlement of any
dispute arising out of or in connection with the agreement only in courts of Karachi, Pakistan. The first clause of
paragraph 10 cannot be invoked to prevent the application of Philippine labor laws and regulations to the subject
matter of this case, , i.e., the employer-employee relationship between petitioner PIA and private respondents. It
has already been pointed out that relationship is much affected with public interest and that the otherwise
applicable Philippine laws and regulations cannot be rendered illusory by the parties agreeing upon some other law
28

to govern their relationship. Neither may petitioner invoke the second clause of paragraph 10, specifying the
Karachi courts as the sole venue for the settlement of disputes between the contracting parties. Even a cursory
scrutiny of the relevant circumstances of this case will show the multiple and substantive contacts between
Philippine law and Philippine courts, on the one hand, and the relationship between the parties, upon the other: the
contract was not only executed in the Philippines, it was also performed here, at least partially; private respondents
are Philippine citizens and residents, while petitioner, although a foreign corporation, is licensed to do business
(and actually doing business) and hence resident in the Philippines; lastly, private respondents were based in the
Philippines in between their assigned flights to the Middle East and Europe. All the above contacts point to the
Philippine courts and administrative agencies as a proper forum for the resolution of contractual disputes between
the parties.
Under these circumstances, paragraph 10 of the employment agreement cannot be given effect so as to oust
Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and in any event, the
petitioner PIA did not undertake to plead and prove the contents of Pakistan law on the matter; it must therefore be
presumed that the applicable provisions of the law of Pakistan are the same as the applicable provisions of
Philippine law.
54
SEAFDEC
Borlas
G.R. Nos. 97468-70 September 2, 1993
SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER represented by its Chief, DR. FLOR J. LACANILAO,
petitioner, vs.DANILO ACOSTA in his capacity as Labor Arbiter of the National Labor Relations Commission,
Regional Arbitration, Branch VI, CORAZON CANTO, DAN BALIAO, ELIZABETH SUPETRAN, CARMELITA
FERRER, CATHRYN CONTRADOR, and DORIC VELOSO, respondents.
VITUG, J.:
Facts: Two labor cases were filed by the herein private respondents against the petitioner, before the National
Labor Relations Commission (NLRC), Regional Arbitration Branch, Iloilo City and claimed having been wrongfully
terminated from their employment by the petitioner. The petitioner, contended to be an international intergovernment organization, composed of various Southeast Asian countries, filed a Motion to Dismiss, challenging
the jurisdiction of the public respondent in taking cognizance of the above cases. LA denied said motion and as
wells as petitioners motion for reconsideration.Hence, the instant petition. The private respondents, as well as
respondent labor arbiter, allege that the petitioner is not immune from suit and assuming that if, indeed, it is an
international organization, it has, however, impliedly, if not expressly, waived its immunity by belatedly raising the
issue of jurisdiction.
Issue:
Whether
SEAFDEC
is
an
international
agency
enjoying
diplomatic
immunity?
Ruling: It is beyond question that petitioner SEAFDEC is an international agency enjoying diplomatic immunity.
Furthermore, Section 2 of the same decree had provided for the autonomous character of SEAFDEC. Anent the
issue of waiver of immunity, suffice it to say at the moment that the petitioner has timely raised the issue of
jurisdiction. While the petitioner did not question the public respondent's lack of jurisdiction at the early stages of
the proceedings, it, nevertheless, did so before it rested its case and certainly well before the proceedings thereat
had terminated.
55
Department
Gubantes
DFA vs NLRC
Cases involving entities immune from suit
Private respondent initiated NLRC-NCR case for his alleged illegal dismissal by ADB and the latter's violation of the
labor-only contracting law. ADB and the DFA notified respondent Labor Arbiter that the ADB, as well as its
President and Office, were covered by an immunity from legal process. The LA took cognizance of the complaint on
the impression that the ADB had waived its diplomatic immunity from suit and ruled in favor of the employee. ADB
did not appeal the decision. DFA referred the matter to the NLRC and sought a formal vacation of the void
judgment. NLRC ruled that the defense of immunity could have been raised before the LA by a special appearance,
which may not be considered as a waiver of the very defense being raised. According to NLRC, any decision
thereafter is subject to legal remedies, including appeals to the appropriate division of the Commission. They
suggested that an appropriate complaint be lodged with Ombudsman if the DFA feels that the action of LA was
misconduct.
ISSUE
WON diplomatic immunity is extended to the ADB.
RULING
Yes. Article 50(1) of the Charter provides that the Bank shall enjoy immunity from every form of legal process,
except in cases arising out of or in connection with the exercise of its powers to borrow money, to guarantee
obligations, or to buy and sell or underwrite the sale of securities. The stipulations of both the Charter and
29

Headquarters Agreement should be able, may well enough, to establish that, except in the specified cases of
borrowing and guarantee operations, as well as the purchase, sale and underwriting of securities, the ADB enjoys
immunity from legal process of every form. The Bank's officers, on their part, enjoy immunity in respect of all acts
performed by them in their official capacity. The Charter and the Headquarters Agreement granting these
immunities and privileges are treaty covenants and commitments voluntarily assumed by the Philippine
government which must be respected.
56
Jusmag
Jimenez
JUSMAG Philippines v. NLRC
GR No. 108813, December 15, 1994 (cases involving entities immune from suit case- foreign government)
Facts:
Private respondent was one of the seventy-four (74) security assistance support personnel(SASP) working at
JUSMAG-Philippines. He had been with JUSMAG from December 18, 1969, until his dismissal on April 27, 1992.
When dismissed, he held the position of Illustrator 2 and was the incumbent President of JUSMAG PHILIPPINESFILIPINO CIVILIAN EMPLOYEES ASSOCIATION (JPFCEA), a labor organization duly registered with the
Department of Labor and Employment. His services were terminated allegedly due to the abolition of his position.
He was also advised that he was under administrative leave until April 27, 1992.
Private respondent filed a complaint with the Department of Labor and Employment on the ground that he was
illegally suspended and dismissed from service by JUSMAG. He asked for his reinstatement.
JUSMAG then filed a Motion to Dismiss invoking its immunity from suitas an agency of the United States. It
further alleged lack of employer-employee relationship and that it has no juridical personality to sue and be sued.
Labor Arbiter Daniel C. Cueto dismissed the subject complaint " for want of jurisdiction."Private respondent
appealed to the National Labor Relations Commission (public respondent), assailing the ruling that petitioner is
immune from suit for alleged violation of our labor laws. JUSMAG filed its Opposition, reiterating its immunity
from suit for its non-contractual, governmental and/or public acts. NLRC reversed the ruling of the Labor Arbiter
as it held that petitioner had lost its right not to be sued.
Issue:
Whether JUSMAG Philippines is immune from suit
Ruling:
Yes. A suit against JUSMAG id one against the US government, and in the absence of any waiver or consent from
the latter to the suit, the complaint against JUSMAG cannot prosper. Immunity from suit is one of the universally
recognized principles of international law that the Philippines recognizes and adopts the generally accepted
principles of international law as part of the law of the land. As it stands now, the applictaion of the doctrine of
immunity from suit has been restricted to sovereign ams governmental activities (jure imperi) and does not extend
to commercial. Private and proprietary acts (jure gestionis)
57
US v Hon
Carpio
58
Ebro
59
Pacific
Pacific Consultant International, Asia, Inc. V. Schofeld
GR 166920. Feb 19, 07
Ponente. Callejo, Sr.
Carpio
Jurado
Facts.
Respondent is a Canadian Citizen and was a resident of British Columbia, Canada. He had been a
consultant in the field of environmenta, engineering. The petitioner was engaged in the business of providing
specialty and technical services. Eventually, Schonfeld was hired as a Sector Manager for water and sanitation woth
a condition that any questions regarding the conditions of mplyment between the employee and the company is to
be settled by the Courtof Arbitration in London. Unfortunately, respondent was terminated for the reason that the
company was not successful in the water and sanitation business. the respondent filed a complaint for illegal
dismissal against the petitioner before the Labor Arbiter. petitioner contended that the venue was improperly laid
under the conditions on employment, the parties had agreed that any employment related dispute be brought
before the London Clurt of Arbitration.
Issue. whether the contetion of the petitioner is valid?
Held. No. The rule on stipulations regakrding the venue qre considered valid and enforceable, venue stipualtion
in a contrqct do not supersede the general rule set forth in rule 4 of the rules of court in the absence of qualifying or
restrictive words. they should be consijdered merely as an agreement or additonal forum, not as limitng venur to
30

the specified place.
60
Manila
Otsuka
MANILA HOTEL CORP. VS. NLRC, G.R. NO. 120077, OCT. 13,2000
PONENTE:PARDO.J.:
PLACE:HONGKONG AND MANILA
In May 1988, 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 hotels 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.
ISSUE: Whether or not the NLRC has jurisdiction over the case.
HELD: No. The NLRC is a very inconvenient forum for the following reasons:
1. The only link that the Philippines has in this case is the fact that Santos is a Filipino;
2. However, the Palace Hotel and MHIL are foreign corporations MHC cannot be held liable because it merely
owns 50% of MHIL, it has no direct business in the affairs of the Palace Hotel. The veil of corporate fiction cant be
pierced because it was not shown that MHC is directly managing the affairs of MHIL. Hence, they are separate
entities
3. Santos contract with the Palace Hotel was not entered into in the Philippines;
4. Santos contract was entered into without the intervention of the POEA (had POEA intervened, NLRC still does
not
have
jurisdiction
because
it
will
be
the
POEA
which
will
hear
the
case);
5. MHIL and the Palace Hotel are not doing business in the Philippines; their agents/officers are not residents of
the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts pertaining to the case. It is not
competent to determine the facts because the acts complained of happened outside our jurisdiction. It cannot
determine which law is applicable. And in case a judgment is rendered, it cannot be enforced against the Palace
Hotel
(in
the
first
place,
it
was
not
served
any
summons).
The Supreme Court emphasized that under the rule of forum non conveniens, a Philippine court or agency may
assume jurisdiction over the case if it chooses to do so provided:
(1) that the Philippine court is one to which the parties may conveniently resort to;
(2) that the Philippine court is in a position to make an intelligent decision as to the law and the facts; and
(3) that the Philippine court has or is likely to have power to enforce its decision.
None of the above conditions are apparent in the case at bar.
61
Philippine
Piedad
Philippine National Bank v. Cabansag
GR.no. 157010 June 21, 2005
Panganiban, J.:
Facts: Florence Cabansag arrived as atourist in Singapore. She applied for employment in the PNB Singapore
Brance and was hired due to her credentials. Barely three months in the office, she was told by the assistant vice
president and the general manager that they were told that they were asked to tell er that her resignation was
procured from the bank due to cost cutting and the wanting of a Chinese speaking accountant and that te branch
will be sold. She was warned that unless she pass a letter of resignation, her employment record will be marked
dismissed. A complaint was filed with the Labor Arbiter and ruled in favor of Cabansag.
Issue: Whether or not the arbitration of the NLRC in the National Capital Region is the most convenient venue or
forum to hear and decide the instant case.
Ruling: Yes. Sec. 1 (a) of the Rule IV of the NLRC Rules of Procedure reads that: All cases which the Labor Arbiter
have authority to hear and decide may be filed in the Regional Arbitration Branch (RAB) having jurisdiction over
the
workplace
of
petitioner.
In cases of OFWs, the law has given the complainant a choice between his residence or the place of office of the
31

employer. In this case, CAbansag returned to the Philippines in her residence in Filinvest, Quezon City. Thus, filing
her complaint before the RAB ffice of the Quezon City is a valid choice.
62
Austria
Rigor
AUSTRIA VS. NLRC
G.R. NO. 124382 AUGUST 16, 1999
KAPUNAN, J.:
FACTS:
Private respondent Central Philippine Union Mission Corporation of the Seventh Day Adventists (SDA) is a
religious corporation under Philippine law and is represented by the other private respondents. Petitioner was a
pastor
of
SDA
until
1991,
when
his
services
were
terminated.
Austria worked with SDA for 28 years. He started as a literature evangelist in 1963 then got promoted several
times. He became the Assistant Publishing Director in the West Visayan Mission of the SDA in 1968 and Pastor in
the West Visayan Mission in 1972. Finally in 1989, he was promoted as District Pastor of the Negros Mission of the
SDA.
On various occasions from August to October 1991, Austria received several communications from Mr. Ibesate,
treasurer of the Negros Mission, asking the former to admit accountability and responsibility for the church tithes
and offerings collected by his wife, Thelma Austria, in his district and to remit the same to the Negros Mission.
In his answer, petitioner said that he should not be made accountable since it was private respondent Pastor Buhat
and Mr. Ibesate who authorized his wife to collect the tithes and offerings since he was very sick to do the collecting
at that time.
Thereafter, petitioner went to the office of Pastor Buhat, president of the Negros Mission, and asked for a
convention to settle the dispute between petitioner and Pastor Rodrigo. Pastor Buhat denied the request of
petitioner because there was no quorum. The two exchanged heated arguments until petitioner left the office.
However, while on his way out, he heard Pastor Buhat saying, "Pastor daw inisog na ina iya (Pador you are talking
tough) which prompted him to go back and overturn Pastor Buhats table, scatter books in the office, bang Buhats
attach case and throw the phone.
Petitioner received a letter inviting him and his wife to attend the meeting to discuss the non-remittance of church
collection and the events that transpired between him and Pastor Buhat. A fact-finding committee was created to
investigate petitioner. Subsequently, petitioner received a letter of dismissal citing misappropriation of
denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties, and
commission of an offense against the person of employer's duly authorized representative, as grounds for the
termination of his services.
1) Petitioner filed a complaint with the Labor Arbiter for illegal dismissal. = decision rendered in favor of petitioner
2) SDA appealed to NLRC = decision rendered in favor of respondent
3)
Petitioner
filed
motion
for
reconsideration
=
reinstated
decision
of
Labor
Arbiter
4) SDA filed motion for reconsideration = decision rendered in favor of respondent (grabe ang kulit!)
Hence, this recourse.
ISSUE:
1) WON the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed by petitioner against the
SDA;
2) WON the termination of the services of petitioner is an ecclesiastical affair, and, as such, involves the separation
of church and state;
RULING:
1) YES.
2) NO.
The principle of separation of church and state finds no application in this case. The rationale of the principle of the
separation of church and state is summed up in the familiar saying, "Strong fences make good-neighbors." The idea
advocated by this principle is to delineate the boundaries between the two institutions and thus avoid
encroachments by one against the other because of a misunderstanding of the limits of their respective exclusive
jurisdictions.
Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to
include religious corporations, such as the SDA, in its coverage. Article 278 of the Labor Code on post-employment
states that the provisions of this Title shall apply to all establishments or undertakings, whether for profit or not.
Obviously, the cited article does not make any exception in favor of a religious corporation. This is made more
32

evident by the fact that the Rules Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the
Termination of Employment and Retirement.
With this clear mandate, the SDA cannot hide behind the mantle of protection of the doctrine of separation of
church and state to avoid its responsibilities as an employer under the Labor Code.
Finally, as correctly pointed out by petitioner, private respondents are estopped from raising the issue of lack of
jurisdiction for the first time on appeal. It is already too late in the day for private respondents to question the
jurisdiction of the NLRC and the Labor Arbiter since the SDA had fully participated in the trials and hearings of the
case from start to finish.
The case at bar does not concern an ecclesiastical or purely religious affair as to bar the State from taking
cognizance of the same. An ecclesiastical affair is "one that concerns doctrine, creed, or form of worship of the
church, or the adoption and enforcement within a religious association of needful laws and regulations for the
government of the membership, and the power of excluding from such associations those deemed unworthy of
membership. Examples of this so-called ecclesiastical affaits are proceedings for excommunication, ordinations of
religious ministers, administration of sacraments and other activities with attached religious significance. The case
at bar does not even remotely concern any of the given examples. What is involved here is the relationship of the
church as an employer and the minister as an employee. It is purely secular and has no relation whatsoever with the
practice of faith, worship or doctrines of the church. 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.
The issue being the legality of petitioners dismissal, the same must be measured against the requisites for a valid
dismissal, namely: (a) the employee must be afforded due process, i.e., he must be given an opportunity to be heard
and to defend himself, and; (b) the dismissal must be for a valid cause as provided in Article 282 of the Labor Code.
Without the concurrence of this twin requirements, the termination would, in the eyes of the law, be illegal. This
requirements are not present in this instant case at bar. Therefore, the dismissal was illegal. Petitioner is entitled to
reinstatement to his former position without loss of seniority right and the payment of full backwages without any
deduction corresponding to the period from his illegal dismissal up to actual reinstatement.
63
De Castro
Carpio
64
Aleman
Carpio
65
Rubberworld
RUBBERWORLD INC V NLRC
Valera
FACTS:
Petitioner filed a petition for suspension of payments praying that it be declared in a state of suspension of
payments and that the SEC accordingly issue an order restraining its creditors from enforcing their claims against
petitioner
corporation.
The
SEC
favorably
ruled
the
petition.
Private respondents who claim to be employees of the petitioner filed against the latter for complaints of illegal
dismissal, unfair labor practice, damages and payment of separation pay, retirement benefits, 13th month pay and
service incentive pay.
Petitioners moved to suspend the proceedings by virtue of the SEC order but the LA denied the said motion holding
that the said order did not include the suspension of proceedings involving claims against petitioner which have yet
to be ascertained. Hence this petition.
ISSUE:
Whether the NLRC acted in grave abuse of its discretion in affirming the order of LA denying the motion to
suspend proceeding despite the order of the SEC.
RULING:
Yes. Labor claims included in suspension order.
Upon the creation of management committee or the appointment of a rehabilitation receiver, ALL claims for
actions shall be suspended accordingly. No exception in favor of labor claims is mentioned in the law. Since the
law
makes
no
distinction,
neither
should
the
copurt.
Allowing the labor cases to proceed clearly defeats the purpose of automatic stay and severely encumbers the
management committees time and resources.
66
Central
Abad
Case title Central Pangasinan Electric Coop., Inc v. Macaraeg
GR number 145800
Date 22 January 2003
33

Ponente - PUNO, J.:
Facts - Petitioner is an electric cooperative duly organized and existing under Philippine laws. Respondent
Geronima Macaraeg and Maribeth de Vera are employees of petitioner. Sometime in January 1999, petitioner,
through its Finance Department, noticed that several checks payable to petitioner from the collections in the Area V
office were returned due to insufficiency of funds. Petitioner, through de Guzman, issued a memorandum to
respondents placing them under preventive suspension and requiring them to explain in writing within forty-eight
(48) hours why they misappropriated cooperative funds. This allegations were denied by the respondents.
On the basis of said findings and recommendation, the General Manager issued to respondents separate notices of
termination for serious misconduct, and breach of trust and confidence reposed on them by management.
Respondents, with the help of the President and representative of the Union, , questioned their dismissal before the
National Conciliation and Mediation Board (NCMB). They claimed that their dismissal was without just cause and
in violation of the Collective Bargaining Agreement (CBA), which requires that the case should first be brought
before a grievance committee. Eventually, the parties agreed to submit the case to a voluntary arbitrator for
arbitration. Voluntary arbitrator rendered a decision in favor of respondents and held that there was a failure to
comply with grievance procedure.
Issue whether there was a violation of the CBA grievance procedure
Ruling - the first issue raised in the petition pertaining to the alleged violation of the CBA grievance procedure is
moot and academic. The parties active participation in the voluntary arbitration proceedings, and their failure to
insist that the case be remanded to the grievance machinery, shows a clear intention on their part to have the issue
of respondents illegal dismissal directly resolved by the voluntary arbitrator. Thus, it was unnecessary to rule on
the matter in light of their preference to bring the illegal dismissal dispute to voluntary arbitration without passing
through the grievance machinery.
67
Perpetual
Perpetual Help Credit Cooperative, Inc. v. Macaraeg
GR No. 121948, October 8, 2001
Sandoval-Gutierrez, J.
Abella
Facts: Private respondents Faburada et al. filed a complaint against PHCCI for illegal dismissal, premium pay,
separation pay, wage differential, moral damages and attorneys fees. Petitioner PHCCI filed a motion to dismiss
the complaint on the ground that there is no employer-employee relationship between them as private respondents
are all members and co-owners of the cooperative. Furthermore, private respondents have not exhausted the
remedies provided in the cooperative by-laws. Petitioner filed a supplemental motion to dismiss alleging that
Article 121 of R.A. No. 6939, otherwise known as the Cooperative Development Authority Law which requires
conciliation or mediation within the cooperative before a resort to judicial proceeding. The Labor Arbiter denied
petitioners motion to dismiss, holding that the case is impressed with employer-employee relationship and that the
law on cooperatives is subservient to the Labor Code. NLRC affirmed the same.
Issue: Whether respondent judge committed grave abuse of discretion in ruling that there is an employer-employee
relationship between the parties and that private respondents were illegally dismissed.
Ruling: No. The SC supports the findings of the respondent court. In determining the existence of an employeremployee relationship, the following elements are considered: (1 ) the selection and engagement of the worker or
the power to hire; (2) the power to dismiss; (3) the payment of wages by whatever means; and (4) the power to
control the workers conduct, with the latter assuming primacy in the overall consideration. No particular form of
proof is required to prove the existence of an employer-employee relationship. Any competent and relevant
evidence may show the relationship.
The above elements are present in the case . Petitioner PHCCI, through Mr. Edilberto Lantaca, Jr., its Manager,
hired private respondents to work for it. They worked regularly on regular working hours, were assigned specific
duties, were paid regular wages and made to accomplish daily time records just like any other regular employee.
They worked under the supervision of the cooperative manager. But unfortunately, they were dismissed. That an
employer-employee exists between the parties is shown by the averments of private respondents in their respective
affidavits.
Article 121 of Republic Act No. 6938 (Cooperative Code of the Philippines) provides the procedure how cooperative
disputes are to be resolved, thus:
ART. 121. Settlement of Disputes. Disputes among members, officers, directors, and committee members, and
intra-cooperative disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or
34

mediation mechanisms embodied in the by-laws of the cooperative, and in applicable laws.
Should such a conciliation/mediation proceeding fail, the matter shall be settled in a court of competent
jurisdiction.
Complementing this Article is Section 8 of R.A. No. 6939 (Cooperative Development Authority Law) which reads:
SEC. 8 Mediation and Conciliation. Upon request of either or both parties, the Authority shall mediate and
conciliate disputes within a cooperative or between cooperatives: Provided, That if no mediation or conciliation
succeeds within three (3) months from request thereof, a certificate of non- resolution shall be issued by the
Commission prior to the filing of appropriate action before the proper courts.
The above provisions apply to members, officers and directors of the cooperative involved in disputes within a
cooperative
or
between
cooperatives.
There is no evidence that private respondents are members of petitioner PHCCI and even if they are, the dispute is
about payment of wages, overtime pay, rest day and termination of employment. Under Art. 217 of the Labor Code,
these disputes are within the original and exclusive jurisdiction of the Labor Arbiter.
68
San Miguel
Borlas
G.R. No. 164257 July 5, 2010
SAN MIGUEL CORPORATION, Petitioner, - versus - VICENTE B. SEMILLANO, NELSON MONDEJAR, JOVITO
REMADA, ALILGILAN MULTI-PURPOSE COOP (AMPCO) AND MERLYN V. POLIDARIO, Respondents.
MENDOZA, J.:
Facts: AMPCO hired the services of Vicente et al, respondents herein, and were assigned to work in SMCs Bottling
Plant situated at Brgy. Granada Sta. Fe, Bacolod City, in order to perform the following tasks: segregating bottles,
removing dirt therefrom, filing them in designated places, loading and unloading the bottles to and from the
delivery trucks, and performing other tasks as may be ordered by SMCs officers. They were required to work inside
the premises of SMC using [SMCs] equipment. Subsequently, SMC entered into a Contract of Services with
AMPCO designating the latter as the employer of respondents. Later on, they were not allowed to enter the
premises of SMC. AMPCOs project manager told them to wait for further instructions from the SMCs supervisor,
unfortunately, they never heard a word from SMC. They filed a COMPLAINT FOR ILLEGAL DISMISSAL with the
Labor Arbiter against AMPCO and SMC and alleged that they were regular employees as fillers of SMC Bottling
Plant assigned to perform activities necessary and desirable in the usual business of SMC. On the other hand, SMC
raised the defense that it is not the employer of the complainants and that AMPCO is their employer because the
latter is an independent contractor. SMC assailed the jurisdiction of the Labor Arbiter and contended that the
instant dispute is intra-cooperative in nature falling within the jurisdiction of the Arbitration Committee of the
Cooperative Development Authority. LA ruled that respondents were regular employees of SMC and NLRC
affirmed the same. SMC moved for reconsideration. NLRC reversed its earlier ruling and held AMPCO as employer
of respondents because AMPCO was an independent contractor Since it had substantial capital of nearly one (1)
million and had assumed the entire charge and control of respondents services. The CA, however, found that
petitioner SMC wielded the power of control over respondent as they supervised respondents performance of
loading and unloading of beer bottles and the power of dismissal as respondents were refused entry by SMC to its
premises and were instructed by the AMPCO manager to wait for further instructions from the SMCs supervisor.
The CA added that AMPCO was a labor-only contractor since a capital of nearly one million pesos was
insufficient.
Issue: Whether SMC or AMPCO is the employer of respondents?
Ruling: Findings of fact made by the Labor Arbiter and the NLRC, as the specialized agencies presumed to have the
expertise on matters within their respective fields, are accorded much respect and even finality, when supported by
ample evidence and affirmed by the CA. The fact that the NLRC, in its subsequent resolution, reversed its original
decision does not render the foregoing inapplicable where the resolution itself is not supported by substantial
evidence.
The test to determine the existence of independent contractorship is whether or not the one claiming to be an
independent contractor has contracted to do the work according to his own methods and without being subject to
the control of the employer, except only as to the results of the work.
The language of a contract is neither determinative nor conclusive of the relationship between the parties.
Petitioner SMC and AMPCO cannot dictate, by a declaration in a contract, the character of AMPCOs business, that
is,
whether
as
labor-only
contractor,
or
job
contractor.
The evidence is clear that respondents performed activities which were directly related to petitioners main line of
35

business. Petitioner is primarily engaged in manufacturing and marketing of beer products and respondents work
of segregating and cleaning bottles is unarguably an important part of its manufacturing and marketing process.
The law makes the principal responsible over the employees of the "labor-only" contractor as if the principal itself
directly hired the employees.
69
Tanjay
Gubantes
Tanjay
Water
vs
Gabaton
Issues involving local water utilities districts Jurisdiction
FACTS
Consolidated case
1st case: Action for injunction with preliminary mandatory injunction and damages, against Municipality of
Pamplona and its officials to prevent them from interfering in the management of the Tanjay Waterworks System.
2nd case: Labor case
Petitioner Josefino Datuin filed a complaint for illegal dismissal against respondent Tarlac Water District in the
DOLE which decided in his favor. NLRC reversed the decision and dismissed the complaint for lack of jurisdiction,
holding that as the respondent Tarlac Water District is a corporation created by a special law (PD No. 198), its
officers and employees belong to the civil service and their separation from office should be governed by Civil
Service Rules and Regulations.
ISSUE
WON DOLE has jurisdiction over disputes in local water districts.
RULING:
No. Local water districts are quasi-public corporations whose employees belong to the civil service, hence, the
dismissal of those employees shall be governed by the civil service law, rules and regulations. Sec. 25 of PD 198
exempting the employees of water districts from the application of the Civil Service Law was removed from the
statute books. The hiring and firing of employees of government-owned or controlled corporations are governed by
the CS Law. Significantly, Article IX(B), Section 2(1) of the Constitution provides that civil service embraces all
branches, subdivisions, instrumentalities and agencies of the government including government-owned
corporations with original charters. Inasmuch as PD No. 198 as amended, is the original charter of the petitioner,
they come under the coverage of the civil service law.
70
Zamboanga
Jimenez
Zamboanga Water District vs. Buat
GR No. 104389 ( issues involving local water utilities districts- exception)
FACTS:
The Zamboanga City Water District, petitioner herein, is a government-owned and controlled corporation engaged
in the business of supplying water in the City of Zamboanga. Private respondents are all employees of petitioner. A
strike occurred in the company. It was conducted and participated in by private respondents, for which reason they
were separated from their employment. Petitioner thereafter filed a complaint. before the Labor Arbiter to declare
the said strike illegal. The following day the Zamboanga Utilities Labor Union (ZULU), to which private
respondents belonged, filed before the Labor Arbiter, a complaint against petitioner for illegal dismissal and unpaid
wages. The two cases were consolidated and heard together,a consolidated decision was rendered by the Executive
Labor Arbiter declaring both the strike and the dismissal of private respondents illegal and ordering the
reinstatement of private respondents to their former positions, without loss of seniority rights and privileges, but
without back wages. Petitioner appealed to the NLRC. The NLRC, through respondent Commissioners, affirmed
the decision of the Executive Labor Arbiter, with the sole modification that the strike leader, respondent Felix
Laquio herein, be suspended from work without pay for a period of six months, effective ten days from receipt of
the decision. Petitioner moved for a reconsideration, which the NLRC however denied. Petitioner contends that the
NLRC had no jurisdiction to issue the resolutions in question because jurisdiction over labor disputes is vested in
the Civil Service Commission.
ISSUE
Whether jurisdiction over the strike and dismissal of private respondents lodged with the NLRC
Ruling:
No. There is no dispute that petitioner, a water district with an original charter, is a government-owned and
controlled corporation. The established rule is that the hiring and firing of employees of government-owned and
controlled corporations are governed by the provisions of the Civil Service Law and Civil Service Rules and
Regulations. Jurisdiction over the strike and the dismissal of private respondents is therefore lodged not with the
NLRC but with the Civil Service Commission. Petitioner never raised the issue of lack of jurisdiction before the
36

Executive Labor Arbiter, the NLRC or even this. In fact, petitioner itself filed the complaint before the Executive
Labor Arbiter in NLRC, sought affirmative relief therefrom and even participated actively in the proceedings below.
It is only now in this case before us, after the NLRC ordered payment of back wages, that petitioner raises the issue
of lack of jurisdiction. Indeed, it is not fair for a party who has voluntarily invoked the jurisdiction of a tribunal in a
particular matter to secure an affirmative relief therefrom, to afterwards repudiate and deny that very same
jurisdiction to escape a penalty. Petitioner is thus estopped from assailing the jurisdiction of the NLRC and is
bound to respect all the proceedings below.
71
Tolosa
Jurado
EVELYN TOLOSA v. NATIONAL LABOR RELATIONS COMMISSION, QWANA KAIUN (through its residentagent, FUMIO NAKAGAWA), ASIA BULK TRANSPORT PHILS. INC., PEDRO GARATE and MARIO ASIS
G.R. No. 149578. April 10, 2003
Ponente PANGANIBAN, J.:
Facts. Captian Tlosa was hired by Qwana Kaiun, through its manning agent, Asia Bulk Transport Phils., Inc., to be
master of the Vessel named M/V Lady Dona. Capt Tolosa was in a good health condition. During the channeling
activities, Capt. Tolosa was drenched with rainwater. The following day, he had a slight fever and in the succeeding
twelve days, his health rapidly deteriorated resulting to his death. Evelyn Tolosa, wife of Capt. Tolosa, filed a
complaint against Asia Bulk. However, NLRC vacated and dismissed the case on the ground of lack of jurisdiction
over the subject matter.
Issue. Whether NLRC has jurisdiction over the case?
Ruling. None. The court held that the allegations in the complaint determine the nature of the action and the
jurisdiction of courts. After carefully examining the complaint, the court was convinced that the allegations therein
are in the nature of an action based on torts or quasi delicts. The court Regular Courts of Justice have jurisdiction
over the actions for damages, in which EER is merely incidental and in which the cause of action proceeds from a
different source of obligation such as torts.
72
Banez
Otsuka
BANEZ VS. VALDEVILLA
TOPIC:CLAIMS OR COUNTER CLAIMS
PONENTE: GONZAGA-REYES, J.:
PLACE: ILIGAN CITY
FACTS: Petitioner Banez was the sales manager of private respondent in its branch in Iligan City. Banez was
indefinitely suspended, thereafter Banez filed a complaint for illegal dismissal which the LA Nicodemus G.
Palangan favored, the same with the appeal to the NLRC. On appeal, CA denied the motion for expiration of the
reglementary period. Private respondents then filed a case with the RTC Misamis Oriental, to which the petitioner
herein appeal for motion to dismiss on the grounds that the case arose from an employer-employee relationship
was squarely under the exclusive jurisdiction of LA and NLRC under Art.217 (a) paragraph 4 of the Labor code.
ISSUE: Whether the LA has jurisdiction over the case
HELD: YES. The LA has jurisdiction over the case. Under Article 217 (a) paragraph 4 of the Labor Code:
Jurisdiction of Labor Arbiters and the Commission-(a) Except as otherwise provided under this Code the Labor
Arbiters shall have original and exclusive jurisdiction to hear and decided within thirty (30) calendar days after the
submission of 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;
Xxx
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations:
Article 217 should apply with equal force to the claim of an employer for actual damages against its dismiss
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
with
the
illegal
dismissal
case.
Hence, the private respondent should have filed a counterclaim with the LA, however due to appeal of untimeliness
the decision of the LA was deemed final and executor. The petitioner was granted and the case with the RTC was
dismissed.
73
Domondon
Piedad
Domondon v. NLRC
GR.no. 154376 Sept. 30, 2005
Puno,
J.:
37

Facts: Petitioner Domondon was hired as Materials Manager by the Van Melle Phils. All things went well until a
precious general manager was replaced by a Dutch National- Have. Have requested that Domondon file his
resignation letter. He refused and his life at work became difficult until he was removed from the company. He later
filed for a complaint. In their counter complaint, the respondent denied Domondons allegations and even allowed
him to resign. Respondent further averred the parties agreed that in order for him to own the car, he had an
agreement with company that petitioner must pay for it in order to transfer ownership thereof. Subsequent
demands were made but to no avail. When raised to the Labor Arbiter, the complaint by Domondon was denied.
Issue: Whether or not the Labor Arbiter has jurisdiction to hear the counterclaim of the employer and the return of
the car for failure of Domondon to pay.
Ruling: Yes. The Labor Arbiter has jurisdiction.
The Court holds that by the designating clause arising from employer= employee relationship Article 217 should
apply with equal force to the claim of an employer for actual damages against its employee where the basis of the
claim arises from or necessarily connected with the fact of termination, and should be entered as a counterclaim in
the
illegal
dismissal
case.
Private respondent herein made a counterclaim involving the transfer of ownership of the company car to
petitioner. Such transfer is connected with Domondons resignation and thus is covered in jurisdiction by the
LaborArbiter.
74
Philippine
Rigor
75
Halaguena
HALAGUENA V PAL
Valera
FACTS:
Petitioners were employees as flight attendants of respondent PAL. They were members of Flight Attendants and
Stewards Association of the Phils (FASAP). The petitioners manifested that the CBA provision on the compulsory
retirement (female 55 y.o; male 60 y.o) was discriminatory. They filed a special civil action for declaratory relief
with a prayer for the issueance of TRO and writ of preliminary injunction with the RTC. The RTC issued an order
enjoining the respondent for implementing Sec 144 of the CBA
.
Respondents filed a petition for certiorari before the CA praying that the order of RTC be annulled and set aside for
having issued without and/or grave abuse of discretion amounting to lack or excess of jurisdiction. The CA granted,
declaring RTC to have no jurisdiction over the case. Hence this petition.
ISSUE:
Whether the RTC has jurisdiction over petitioners action challenging the legality or constitutionality of the
provisions on compulsory retirement age contained in the CBA between PAL and FASAP.
RULING:
Yes. From the petitioners allegations and relief prayed for its clear that the issue raised is whether the Sec 144 part
A of the PAL-FASAP CBA is unlawful and unconstitutional. Here, the petitoners primary relief is the annulment of
the Sec 144 Part A which allegedly discriminates against them for being female flight attendants. The subject of the
litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Sec 19 of BP 129, as
amended. Being an ordinary action, the same is beyond the jurisdiction of labor tribunals. The said issue cannot be
solved solely applying the LC. Rather, it requires the application of Constitution, labor statues, 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 court, a court of general jurisdiction.
76
Georg
Abad
Case title Georg Grotjahn GMBH & Co. v. Isnani
GR number 109272
Date 10 August 1994
Ponente - PUNO, J
Facts - Petitioner is a multinational company organized and existing under the laws of the Federal Republic of
Germany. Private respondent Lanchinebre was a sales representative of petitioner. Sometime on March 1992, she
secured a loan from petitioner and made additional cash advances. Despite demand, private respondent Romana
failed
to
settle
her
obligation
with
petitioner.
Private respondent Lanchinebre filed with the Arbitration Branch of the NLRC in Manila, a Complaint for illegal
suspension, dismissal and non-payment of commissions against petitioner. On August 18, 1992, petitioner in turn
filed against private respondent a Complaint for damages. Petitioner filed another Complaint for collection of sum
of money against private respondents spouses Romana and Teofilo Lanchinebre. Instead of filing their Answer,
38

private respondents moved to dismiss the Complaint and the same was granted.
Respondent judge issued the first impugned Order, granting the motion to dismiss. She held that the said cash
advances were made pursuant to the employer-employee relationship between the (petitioner) and the said (private
respondent) and as such, within the original and exclusive jurisdiction of the National Labor Relations
Commission.
Issue - WON THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT THE REGULAR COURTS HAVE NO
JURISDICTION OVER DISPUTES BETWEEN AN EMPLOYER AND AN EMPLOYEE INVOLVING THE
APPLICATION PURELY OF THE GENERAL CIVIL LAW
Ruling - the trial court should not have held itself without jurisdiction over Civil Case No. 92-2486. It is true that
the loan and cash advances sought to be recovered by petitioner were contracted by private respondent Romana
Lanchinebre while she was still in the employ of petitioner. Nonetheless, it does not follow that Article 217 of the
Labor Code covers their relationship. 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.
An action for recovery of a sum of money brought by employer, as creditor, against an employee, as debtor, falls
under the jurisdiction of regular courts.
Moreover, private respondents are estopped from assailing the personality of petitioner. The rule is that a party is
estopped to challenge the personality of a corporation after having acknowledged the same by entering into a
contract with it. And the doctrine of estoppel to deny corporate existence applies to foreign as well as to domestic
corporations; one who has dealt with a corporation of foreign origin as a corporate entity is estopped to deny its
corporate existence and capacity. The principle will be applied to prevent a person contracting with a foreign
corporation from later taking advantage of its noncompliance with the statutes chiefly in cases where such person
has received the benefits of the contract, x x x.
77
Santos
Abella
Santos v. Servier Philippines, Inc.
GR No. 166377, November 28, 2008
Nachura, J.
Facts: Petitioner Ma. Isabel T. Santos, as the Human Resource Manager of Servier Philippines, attended a meeting
of all human resource managers of respondent, held in Paris, France together with her family. During her stay in
Paris, she was hospitalized due to "alimentary allergy," as she had recently ingested a meal of mussels which
resulted in a concomitant uticarial eruption. All hospitalization expenses were paid by respondent. When she came
back in the Philippines and underwent medical evaluation, the physician concluded that she had not fully recovered
mentally and physically. This prompted respondent to terminate petitioners services. As a consequence thereof,
respondent offered a retirement package. Of the promised retirement benefits amounting to P1,063,841.76, only
P701,454.89 was released to petitioners husband, the balance thereof was withheld for taxation purposes.
Petitioner then filed a case for unpaid balance of the retirement package. The LA dismissed the complaint.
However, it refused to rule on the legality of the deductions made by respondent from petitioners total retirement
benefits for taxation purposes, as the issue was beyond the jurisdiction of the NLRC. On appeal, NLRC set aside the
ruling of LA. They emphasized that petitioner was not retired from the service; rather, she was dismissed from
employment due to a disease/disability under Article 2842 of the Labor Code. In view of her non- entitlement to
retirement benefits, the amounts received by petitioner should then be treated as her separation pay. CA affirmed
the same.
Issue: Whether determination of legality of taxable benefits was beyond the labor tribunals jurisdiction.
Ruling: No. Contrary to the Labor Arbiter and NLRCs conclusions, petitioners claim for illegal deduction falls
within the tribunals jurisdiction. It is noteworthy that petitioner demanded the completion of her retirement
benefits, including the amount withheld by respondent for taxation purposes. The issue of deduction for tax
purposes is intertwined with the main issue of whether or not petitioners benefits have been fully given her. It is,
therefore, a money claim arising from the employer-employee relationship, which clearly falls within the
jurisdiction of the Labor Arbiter and the NLRC.
Section 32 (B) (6) (a) of the New National Internal Revenue Code (NIRC) provides for the exclusion of retirement
benefits from gross income, thus for the retirement benefits to be exempt from the withholding tax, the taxpayer is
burdened to prove the concurrence of the following elements: (1) a reasonable private benefit plan is maintained by
the employer; (2) the retiring official or employee has been in the service of the same employer for at least ten (10)
years; (3) the retiring official or employee is not less than fifty (50) years of age at the time of his retirement; and
39

(4) the benefit had been availed of only once.
Petitioner was qualified for disability retirement. At the time of such retirement, petitioner was only 41 years of
age; and had been in the service for more or less eight (8) years. As such, the above provision is not applicable for
failure to comply with the age and length of service requirements. Therefore, respondent cannot be faulted for
deducting from petitioners total retirement benefits the amount of P362,386.87, for taxation purposes.
78
Meralco
Borlas
G.R. No. 184769 October 5, 2010
MANILA
ELECTRIC COMPANY, ALEXANDER S. DEYTO and RUBEN A. SAPITULA, Petitioners, versus
ROSARIO GOPEZ LIM, Respondent.
CARPIO MORALES, J.:
Facts: Rosario G. Lim (respondent), a.k.a. Cherry Lim, is an administrative clerk at the Manila Electric Company
(MERALCO). An anonymous letter was posted at the door of the Metering Office of the Administration building of
MERALCO Plaridel, Bulacan Sector, at which respondent is assigned, denouncing respondent which reads:
Cherry Lim:
MATAPOS MONG LAMUNIN LAHAT NG BIYAYA NG MERALCO, NGAYON NAMAN AY GUSTO MONG
PALAMON ANG BUONG KUMPANYA SA MGA BUWAYA NG GOBYERNO. KAPAL NG MUKHA MO, LUMAYAS
KA RITO, WALANG UTANG NA LOOB.
Copies of the letter were also inserted in the lockers of MERALCO linesmen. Alexander Deyto, Head of
MERALCOs Human Resource Staffing, directed the transfer of respondent to MERALCOs Alabang Sector in
Muntinlupa as A/F OTMS Clerk, in light of the receipt of reports that there were accusations and threats directed
against Lim from unknown individuals and which could possibly compromise Lim safety and security. she even
suspects that her transfer to another place of work betray[s] the real intent of management] and could be a
punitive move hence requested for the deferment of the implementation of her transfer. No response to her
request having been received, respondent filed a petition] for the issuance of a writ of habeas data and TRO against
petitioners before the Regional Trial Court (RTC) of Bulacan. By respondents allegation, petitioners unlawful act
and omission consisting of their continued failure and refusal to provide her with details or information about the
alleged report which MERALCO purportedly received concerning threats to her safety and security amount to a
violation of her right to privacy in life, liberty and security,correctible by habeas data. Petitioners moved for the
dismissal of the petition because resort to a petition for writ of habeas data was not in order and the RTC lacked
jurisdiction over the case which properly belongs to the National Labor Relations Commission (NLRC). RTC ruled
in favor of respondent and justified that , recourse to a writ of habeas data should extend not only to victims of
extra-legal killings and political activists but also to ordinary citizens, like respondent whose rights to life and
security are jeopardized by petitioners refusal to provide her with information or data on the reported threats to
her person. Hence this petition. Petitioners thus maintain that the RTC had no authority to restrain the
implementation of the Memorandum transferring respondents place of work which is purely a management
prerogative, and that OCA-Circular No. 79-2003[12] expressly prohibits the issuance of TROs or injunctive writs in
labor-related cases.
Issue: Whether an employee may invoke the remedies available under writ of habeas data where an employer
decides to transfer her workplace on the basis of copies of an anonymous letter posted therein?
Ruling: Respondents plea that she be spared from complying with MERALCOs Memorandum directing her
reassignment to the Alabang Sector, under the guise of a quest for information or data allegedly in possession of
petitioners, does not fall within the province of a writ of habeas data. The habeas data rule, in general, is designed
to protect by means of judicial complaint the image, privacy, honor, information, and freedom of information of an
individual. It is meant to provide a forum to enforce ones right to the truth and to informational privacy, thus
safeguarding the constitutional guarantees of a persons right to life, liberty and security against abuse in this age of
information technology.
Respondent in fact trivializes these threats and accusations from unknown individuals as highly suspicious,
doubtful or are just mere jokes if they existed at all.[18] And she even suspects that her transfer to another place
of work betray[s] the real intent of management] and could be a punitive move. Her posture unwittingly
concedes
that
the
issue
is
labor-related.
The writs of amparo and habeas data will NOT issue to protect purely property or commercial concerns nor when
the grounds invoked in support of the petitions therefor are vague or doubtful.[16] Employment constitutes a
property right under the context of the due process clause of the Constitution.[17] It is evident that respondents
reservations on the real reasons for her transfer - a legitimate concern respecting the terms and conditions of ones
employment - are what prompted her to adopt the extraordinary remedy of habeas data. Jurisdiction over such
concerns is inarguably lodged by law with the NLRC and the Labor Arbiters.
40

79
Halaguena
Gubantes
Halaguena vs PAL
RTC Jurisdiction CBA: Reasonable Causal Connection Rule
Petitioners were employed as female flight attendants of PAL on different dates prior to November 22, 1996. They
are members of of the Flight Attendants and Stewards Association of the Philippines, a labor organization certified
as the sole and exclusive bargaining representative of the flight attendants/stewards and pursers of respondent.
PAL and FASAP entered into a CBA incorporating the terms and conditions of their agreement for the years 2000
to 2005. Petitioners and several female cabin crews manifested that the CBA provision on compulsory retirement at
the age of 55 for females is discriminatory, and demanded for an equal treatment with their male counterparts.
Petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the Issuance of Temporary Restraining
Order and Writ of Preliminary Injunction with the RTC. The RTC upheld its jurisdiction over the case claiming that
the thrust of the Petition is Sec. 144 of the CBA which is allegedly discriminatory. The allegation in the Petition do
not make out a labor dispute arising from EE relationship as none is shown to exist. This case is not directed
specifically against respondent arising from any act of the latter, nor does it involve a claim against the respondent.
CA ruled that the RTC has no jurisdiction over the case.
ISSUE
WON the RTC has jurisdiction over the petitioners' action challenging the legality of the provisions of the CBA.
RULING
Yes. The petitioners' allegations and relief prayed for in its petition, it is clear that the issue raised is whether the
abovementioned provision is unlawful and unconstitutional. 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. The said issue cannot be resolved solely by applying the Labor Code. 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 EE 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 just like
in this case. Grievance machinery and voluntary arbitrators do not have the power to determine and settle the
issues at hand. They have no competence to decide constitutional issues relative to the questioned compulsory
retirement age. Although the CBA provides for a procedure for the adjustment of grievances, such referral to the
grievance machinery and voluntary arbitration would be inappropriate to the petitioners, because the union and
the management have unanimously agreed to the terms of the CBA and their interest is unified.
80
Sonza
Jimenez
Sonza
v.
ABS
CBN
GR No. 135081June 10, 2004 (independent contractor- money claims)
FACTS:
In May 1994, ABS-CBN signed an agreement with the Mel and JayManagement and Development Corporation
(MJMDC). ABS-CBN wasrepresented by its corporate officers while MJMDC was represented by Sonza,as
President and general manager, and Tiangco as its EVP and treasurer.Referred to in the agreement as agent,
MJMDC agreed to provide Sonzasservices exclusively to ABS-CBN as talent for radio and television. ABSCBNagreed to pay Sonza a monthly talent fee of P310, 000 for the first year andP317, 000 for the second and third
year.On April 1996, Sonza wrote a letter to ABS-CBN's President, Eugenio Lopez III,where he irrevocably resigned
in view of the recent events concerning hisprogram and career. The acts of the station are violative of the
Agreementand said letter will serve as notice of rescission of said contract. The letteralso contained the waiver and
renunciation for recovery of the remainingamount stipulated but reserves the right to seek recovery of the
otherbenefits under said Agreement.After the said letter, Sonza filed with the Department of Labor and
Employment a complaint alleging that ABS-CBN did not pay his salaries,separation pay, service incentive pay,13th
month pay, signing bonus, travelallowance and amounts under the Employees Stock Option Plan (ESOP). ABSCBN contended that no employee-employer relationship existed between theparties. However, ABS-CBN continued
to remit Sonzas monthly talent feesbut opened another account for the same purpose. The Labor Arbiter dismissed
the complaint and found that there is noemployee-employer relationship. The LA ruled that he is not an employee
byreason of his peculiar skill and talent as a TV host and a radio broadcaster.Unlike an ordinary employee, he was
free to perform his services inaccordance with his own style. NLRC and CA affirmed the LA. Should there beany
complaint, it does not arise from an employer-employee relationship butfrom a breach of contract.
Issue:
Whether Sonzas money claims be cognizablae by NLRC
NO. SONZAs claims are all based on the May 1994 Agreement and stock option plan, and not on the Labor Code.
Clearly, the present case does not call for an application of the Labor Code provisions but an interpretation and
implementation of the May 1994 Agreement. In effect, SONZAs cause of action is for breach of contract which is
intrinsically a civil dispute cognizable by the regular courts.
81
Consulta
Jurado
41

RAQUEL P. CONSULTA, v. COURT OF APPEALS, PAMANA PHILIPPINES, INC., RAZUL Z. REQUESTO, and
ALETA TOLENTINO
G.R. No. 145443. March 18, 2005
Ponente. CARPIO, J.:
Facts. Private respondent, PAMANA, was engaged in health care business. Consulta was a managing associate of
PAMANA with an agreement of a non-EER basis. Consulta negotiated, in behalf of PANAMA, with the Federation
of Filipino Civilian Employees Association (FFCEA) covering its members under the PAMANA health care plans.
Eventually, PAMANA and U.S Naval Supply Depot signed the FFCEA account. Consulta claimed that PAMANA did
not pay her commission for the FFCEA account and filed a complaint for unpaid wages before the LA. LA ordered
to pay Consulta which was affirmed by NLRC. On appeal, the decision of the NLRC was reversed by the CA on the
ground that there is no EER and Consulta was a commission agent.
Issue. Whether LA has jurisdiction over Consultas money claims?
Ruling. None the court applied the four fold test (power to hire; payment of wages; power to dismiss; power to
control),
wherein
the
power
to
control
is
the
most
important.
In the present case, the power to control is missing. Consultas action was not subject to the control of PAMANA.
Consulta failed to show that she had to report for work at definite hours. The amount of time she devoted was left
entirely to her discretion. The means and methods of performing her job were left to her judgment. It was
established that Consulta only received suggestions from PAMANA regarding the sales. Hence, there is no EER
between parties. The LA and NLRC have no jurisdiction on Consultas money claims.
82
Banez
Otsuka
83
Pepsi
Pepsi Cola v. Galang
GR.no. 89621 Sept. 24, 1991
Piedad
Cruz, J.:
Facts: Private respondents were employees of the petitioner who were suspected of complicity in the irregular
disposition of empty bottles of Pepsi Cola.Petitioners filed a criminal complaint against this employees but was
later withdrawn and substituted with the criminal complaint of falsification of private documents. After a
preliminary investigation was conducted, it was dismissed. After the Administrative investigation, the respondents
were dismissed by the petitioner. Aggrieved, respondents filed a civil complaint for malicious proseuion in the RTC
of TAnauan, Leyte. Petitioner cried lack of jurisdiction by the Trial Court.
Issue: Whether or not the Trial court has jurisdiction of the civil complaint.
Ruling: Yes. It must be stressed that not every controversy involving workers and their employers can be resolved
only by the Labor Arbiter.
This will be so only if there is a reasonable causal connection between the claim asserted and the employeeemployer relations to put the case under the provision of Article 217. Absent such a link, the complaint will be
cognizable by the regular courts of justice in the exercise of their civil and criminal jurisdiction.
The case now before the court involves a complaint for damages for malicious prosecution which was filed with the
RTC of Leyte by the employees of the defendant. It does not appear that there is a reasonable causal connection
between the complaint and the employer- employee relationship that will warrant the jurisdiction of the Labor
Arbiter.
84
Bright Maritime
Carpio
85
Pioneer
86
Garcia
GARCIA VS. PAL
G.R.
NO.
CARPIO MORALES, J.:
Rigor
164856
JANUARY
20,
2009
FACTS:
This case stemmed from an administrative charge filed by PAL against employees, herein petitioners after allegedly
42

being caught in the act of sniffing shabu in the workplace. After due notice, PAL dismissed petitioners prompting
the latter to file a complaint for illegal dismissal which was resolved by the Labor Arbiter in their favor ordering
inter alia their reinstatement. Subsequently, respondent company was placed under corporate rehabilitation. From
the Labor Arbiter, respondent appealed to NLRC which reversed said decision. Later, a writ of execution as regards
the reinstatement was issued by the Labor Arbiter. Respondent then filed an urgent petition for injunction on the
ground that it cannot comply with the reinstatement order due to its corporate rehabilitation.
ISSUE:
1. Whether a subsequent finding of a valid dismissal by NLRC removes the basis for implementing the
reinstatement aspect of the Labor Arbiters decision?
2. Whether respondent company is justified in refusing to comply with such reinstatement order in view of its
corporate rehabilitation?
RULING:
1) NO.
2) NO
On the first issue, jurisprudential trend has maintained that even if the order of reinstatement of the Labor Arbiter
is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed
employee during the period of appeal until reversal by the higher court. The employee is not required to reimburse
whatever salary he may have received for he is entitled to such. The opposite view is articulated in Genuino vs
NLRC which states:
If the decision of the Labor Arbiter is later reversed on appeal upon the finding that the ground for dismissal is
valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the
salaries
he
or
she
received
while
the
case
was
pending
appeal,
xxx.
Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal is based
on
a
just
cause,
then
she
is
not
entitled
to
be
paid
the
salaries
xxx.
However, the dearth of authority supporting Genuino renders inutile the rationale of reinstatement pending
appeal. Pursuant to police power, the State may authorize an immediate implementation, pending appeal of a
decision reinstating a dismissed or separated employee since that saving act is designed to stop, although
temporarily since the appeal may be decided in favor of the appellant, a continuing threat or danger to the survival
or even the life of the dismissed or separated employee and his family. Thus, the Refund Doctrine easily
demonstrates how a favorable decision by the Labor Arbiter could harm more than help a dismissed employee. The
employee, to make both ends meet, would necessarily have to use up the salaries received during the pendency of
the appeal, only to end up having to refund the sum in case of a final unfavorable decision. The provision of Art.
223 is clear that an award by the Labor Arbiter for reinstatement shall be immediately executory even pending
appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative
intent is quite obvious i.e. to make an award of reinstatement immediately enforceable, even pending appeal. The
Court reaffirms such prevailing principle that even if the order of reinstatement is reversed on appeal, it is
obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period
of appeal until reversal by the higher court.
After the labor arbiters decision is reversed by a higher court, the employee may be barred from collecting the
accrued wages if it is shown that the delay in enforcing the reinstatement was without fault of the employer. The
test is two-fold: a) there must be actual delay or the fact that the order of reinstatement pending appeal was not
executed prior to its reversal and b) the delay must not be due to the employers unjustified act or omission. If the
delay is due to employers unjustified refusal, the employer may still be required to pay the salaries notwithstanding
the reversal of the labor arbiters decision. In Genuino, the former NLRC Rules of Procedure was still applied in
which it did not lay down a mechanism to promptly effectuate the self-executory order of reinstatement, making it
difficult to establish that the employer actually refused to comply. The new NLRC Rules of Procedure which took
effect on Jan. 7, 2006 now require the employer to submit a report of compliance within 10 calendar days from
receipt of the labor arbiters decision. The employee need not file a motion for the issuance of a writ of execution
since the labor arbiter shall thereafter motu proprio issues the writ. It is settled that upon appointment by SEC of a
rehabilitation receiver, all actions for claims before any tribunal against the corporation shall ipso jure be
suspended. Case law recognizes that unless there is a restraining order, the implementation of the order of
reinstatement is ministerial and mandatory. The suspension of claims partakes of the nature of a restraining order
that constitutes legal justification for respondents non-compliance with the reinstatement order. Respondents
failure to exercise the alternative options of actual reinstatement and payroll reinstatement was thus justified. The
petition is denied. The CA decision annulling the NLRC resolutions affirming the validity of the Writ of Execution
43

and Notice of Garnishment is affirmed.
87
Pfizer
PFIZER V VELASCO
Valera
FACTS:
Velasco was employed by Pfizer as professional health care representative. Due to her pregnancy, she was advised
bed rest which resulted to her leave of absence. While on leave, she was advised upon the investigation of her
possible company violations. On the 2nd and 3rd show cause notice she refused to answer and later she was advised
that the petitioner already terminated her services. Velasco filed a complaint before the LA which declared the
dismissal illegal ordering her reinstatement with backwages further awarding moral and exemplary damages plus
attys fees. The petitioner appealed to the NLRC but was denied and deleted the respondents award for damages.
Petitioner then filed with the CA a special civil action for issuance of writ of certiorari under rule 65. CA upheld the
validity of respondents dismissal.
CA later modified its earlier decision ordering Pfizer to pay respondent her wages from the date of LAs decision up
to CAs decision. Pfizer contend that there was no unjustified refusal on its part because It was respondent who
refused to return to work. Hence this petition.
ISSUE:
RULING:
The petition is without merit. Under Art 223 of the LC, an employee entitled to reinstatement shall either be
entitled back to work under the same terms and conditions prevailing prior to his dismissal or separation or at the
option of the employer, merely reinstated in the payroll. It is established in jurisprudence that reinstatement
means restoration to a state or condition from which had been removed or separated. The person reinstated
assumes the position he had occupied. In the present case, the petitioner did not comply with the rule on
reinstatement, under the same terms and conditions because they sent a letter informing respondent of her
transfer of work assignment form Baguio City to Makati City.
88
Aboc
Abad
Case title Aboc v. Metrobank
GR number 170542-43
Date 13 December 2010
Ponente - MENDOZA, J
Facts - These two cases stemmed from a complaint for illegal dismissal and damages filed by Aboc against
Metrobank. Aboc, the Regional Operations Coordinator of Metrobank in Cebu City alleged that he received an
inter-office letter, requiring him to explain in writing the charges that he had actively participated in the lending
activities of his immediate supervisor, Chua the Branch Manager of Metrobank where he was assigned.
Metrobank, on the other hand, replied that, Chua, Judith Eva Cabrido (assistant manager), Arthur Arcepi
(accountant), and Aboc organized a credit union known as Cebu North Road Investment (CNRI). Said officers and
employees used Metrobanks premises, equipment and facilities in their lending business.
Metrobank then required Aboc to submit a written explanation why he should not be dismissed for cause and
attend a conference in which he was allowed to bring a counsel of his own choice.
Thereafter, Metrobank found that Abocs actions constituted serious misconduct and a breach of trust and
confidence. Metrobank then terminated his services.
LA rendered her decision, finding that Aboc was illegally dismissed from the service by Metrobank. Consequently,
Metrobank was ordered to reinstate complainant Aboc to his former position or to a substantially equivalent
position without loss of seniority rights and other privileges, and to pay said complainant.
NLRC set aside the decision of the LA but ordered Metrobank to pay Aboc reinstatement wages. Aggrieved,
Metrobank challenged the grant of monetary award in a petition before the CA to which the latter affirmed decision
of the NLRC.
Issue - Whether or not the Court of Appeals erred in ruling that the Metrobank was liable to pay the monetary
award claimed by Aboc.
Ruling - The monetary award granted to Aboc was warranted under the law and jurisprudence. In the case at
bench, it cannot be denied that Metrobank opted to reinstate Aboc in its payroll. Since Metrobank chose payroll
reinstatement for Aboc, the Court agrees with the CA that he then became a reinstated regular employee. This
means that he was restored to his previous position as a regular employee without loss of seniority rights and other
privileges appurtenant thereto. His payroll reinstatement put him on equal footing with the other regular
44

Metrobank employees insofar as entitlement to the benefits given under the Collective Bargaining Agreement is
concerned.
The fact that the decision of the LA was reversed on appeal has no controlling significance. The rule is that even if
the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the employer to reinstate
and pay the wages of the dismissed employee during the period of appeal until final reversal by the higher court.
89
Lansangan
Lansangan v. Amkor Technology Phils.
GR No. 177026, January 30, 2009
Carpio-Morales, J.
Abella
Facts: An anonymous e-mail was sent to the General Manager of Amkor Technology Philippines detailing
allegations of malfeasance on the part of its supervisory employees Lunesa Lansangan and Rosita Cendaa for
"stealing company time." Respondent thus investigated the matter, requiring petitioners to submit their written
explanation. Petitioners admitted their wrongdoing. Respondent thereupon terminated petitioners for "extremely
serious offenses" as defined in its Code of Discipline, prompting petitioners to file a complaint for illegal dismissal
against it. The labor arbiter Arthur L. Amansec dismissed petitioners complaint, he having found them guilty of
swiping another employees I.D. card or requesting another employee to swipe ones I.D. card to gain personal
advantage and in the interest of cheating, an offense of dishonesty punishable as a serious form of misconduct and
fraud or breach of trust under Article 282 of the Labor Code, which allows the dismissal of an employee for a valid
cause.
The Arbiter, however, ordered the reinstatement of petitioners to their former positions without backwages
"as a measure of equitable and compassionate relief". On appeal, the NLRC granted
Respondents appeal by deleting the reinstatement aspect of the Arbiters decision. CA while affirming the finding
that petitioners were guilty of misconduct and the like, ordered respondent to pay petitioners their corresponding
backwages without qualification and deduction for the period covering October 20, 2004 (date of the
Arbiters decision) up to June 30, 2005 (date of the NLRC Decision) citing Article 223 of the Labor Code and
Roquero v. PAL.
Issue: Whether petitioner is entitled to backwages under Ativle 223 of the Labor Code.
Ruling: No. Roquero, as well as Article 223 of the Labor Code on which the appellate court also relied, finds no
application in the present case. Article 223 concerns itself with an interim relief, granted to a dismissed or
separated employee while the case for illegal dismissal is pending appeal, as what happened in Roquero. It does
not apply where there is no finding of illegal dismissal, as in the present case. The Arbiter found petitioners
dismissal to be valid. Such finding had, as stated earlier, become final, petitioners not having appealed it.
Following Article 279 which provides: In cases of regular employment, the employer shall not terminate
the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to
his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his actual reinstatement petitioners are not
entitled to full backwages as their dismissal was not found to be illegal. Agabon v. NLRC so states, payment of
backwages and other benefits is justified only if the employee was unjustly dismissed.
90
Alcantara
Borlas
G.R. No. 155109/G.R. No. 155135/G.R. No. 179220, September 29, 2010
C. Alcantara & Sons, Inc. vs. Court of Appeals / Nagkahiusang Mamumuno sa Alsons-SPFL (NAMAAL-SPFL), et al.
vs. C. Alcantara & Sons, Inc., et al. / Nagkahiusang Mamumuno sa Alsons-SPFL (NAMAAL-SPFL), et al. vs. C.
Alcantara & Sons, Inc., et al.,
ABAD, J.:
Facts: C. Alcantara & Sons, Inc., (the Company) is a domestic corporation engaged in the manufacture and
processing of plywood. Nagkahiusang Mamumuo sa Alsons-SPFL (the Union) is the exclusive bargaining agent of
the Companys rank and file employees. The other parties to these cases are the Union officers and their striking
members. The Company and the Union filed a notice of strike when their negotiation regarding the economic
provisions of their CBA ended in a deadlock. The Union went on strike and the Company filed a petition for the
issuance of a writ of preliminary injunction with NLRC to enjoin the strikers from intimidating, threatening,
45

molesting, and impeding by barricade the entry of non-striking employees at the Companys premises. The NLRC
granted said petition. But several attempts to implement the writ failed. Meanwhile the Union filed a petition with
the Court of Appeals (CA), questioning the preliminary injunction order. It was dismissed and the Union did not
appeal.
The Company, on the other hand, filed a petition with the Regional Arbitration Board to declare the Unions strike
illegal for violating the no strike provision of their CBA. The Labor Arbiter ruled that Unions strike illegal and
held that the Union officers should be deemed to have forfeited their employment. With respect to the striking
Union members, Labor Arbiter ordered their reinstatement without backwages. The Company did not reinstate
them. Both parties appealed wherein the company impugned the order of the reinstatement and the union
questioned the illegality of the strike as well as the dismissal of its officers. NLRC affirmed the said decision
however held that the Union members involved, who were identified in the proceedings held in the case, should
also be terminated for having committed prohibited and illegal acts. The CA annulled the NLRC decision and
reinstated that of the Labor Arbiter. The Company and the Union with its officers and members filed separate
petitions for review of the CA decision.
The affected Union members filed with the Labor Arbiter a motion for reinstatement pending appeal by the parties
and the computation of their backwages based on the CA decision. The Labor Arbiter held that the impracticability
of reinstatement owing to the fact that the relations between the terminated Union members and the Company had
been severely strained by the prolonged litigation, payment of separation pay to such Union members was in order.
Both parties appealed the Labor Arbiters resolution to the NLRC. NLRC declared the Labor Arbiters resolution
void and ordered the Company to pay the affected employees accrued wages and 13th month pay considering the
Companys refusal to reinstate them pending appeal. On motion for reconsideration by both parties, NLRC issued
a resolution deleting the grant of accrued wages and 13th month pay to the subject employees.
Upon the Unions petition for certiorari] with the CA, they questioned the NLRCs denial of the terminated Union
members claim for separation pay, accrued wages, and other benefits. The CA ruled that the reinstatement pending
appeal provided under Article 223 of the Labor Code contemplated illegal dismissal or termination cases and not
cases under Article 263. Thus, the CA ruled that the resolution ordering the reinstatement of the terminated Union
members and the payment of their wages and other benefits had no basis. Aggrieved, the Union sought
intervention by this Court.
Issue: Whether the LAs order of reinstatement is immediately executory? Whether the company is liable to Pay
backwages?
Ruling: The CA denied reinstatement for the reason that the reinstatement pending appeal provided under Article
223 of the Labor Code contemplated illegal dismissal or termination cases and not cases under Article 264. But this
perceived distinction does not find support in the provisions of the Labor Code.
The grounds for termination under Article 264 are based on prohibited acts that employees could commit during a
strike. On the other hand, the grounds for termination under Articles 282 to 284 are based on the employees
conduct in connection with his assigned work. Still, Article 217, which defines the powers of Labor Arbiters, vests
in the latter jurisdiction over all termination cases, whatever be the grounds given for the termination of
employment. Consequently, Article 223, which provides that the decision of the Labor Arbiter reinstating a
dismissed employee shall immediately be executory pending appeal, cannot but apply to all terminations
irrespective of the grounds on which they are based.
Here, although the Labor Arbiter failed to act on the terminated Union members motion for reinstatement pending
appeal, the Company had the duty under Article 223 to immediately reinstate the affected employees even if it
intended to appeal from the decision ordaining such reinstatement. The Companys failure to do so makes it liable
for accrued backwages until the eventual reversal of the order of reinstatement by the NLRC, a period of four
months and nine days.
91
Garza
Flores
92
Millenium
Millenium Erectors Corporation vs Magallanes
Requirements to perfect appeal to NLRC
Gubantes
FACTS
Virgilio Magallanes started working in 1988 as a utility man for Laurencito Tiu, Chief Executive Officer of
Millennium Erectors Corporation. He was assigned to different construction projects undertaken by petitioner in
Metro Manila, the last of which was for a building in Libis, Quezon City. In July of 2004, he was told not to report
for work anymore allegedly due to old age, prompting him to file an illegal dismissal complaint before the LA. The
LA rule in favor of the petitioner and dismissed the complaint, holding that respondent knew of the nature of his
46

employment as a project employee. NLRC set aside LA's decision holding that respondent was a regular employee.
Petitioner moved for reconsideration of the NLRC decision, contending that respondent's motion for
reconsideration which it treated as an appeal was not perfected, it having been belatedly filed; that there was no
statement of the date of receipt of the appealed decision; and that it lacked verificatio of copies thereof were not
furnished
the
adverse
parties.
CA
affirmed
NLRC's
decision
ISSUE
WON NLRC erred in treating respondent's motion for reconsideration as an appeal.
RULING
No. In labor cases, rules of procedure should not be applied in a very rigid and technical sense. They are merely
tools designed to facilitate the attainment of justice, and where their strict application would result in the
frustration rather than promotion of substantial justice, technicalities must be avoided. Where the ends of
substantial justice shall be better served, the application of technical rules of procedure may be relaxed. The
requirement regarding verification of a pleading is formal, not jurisdictional. Such requirement is simply a
condition affecting the form of pleading, the non-compliance of which does not necessarily render the pleading
fatally defective. As for the requirement on proof of service, it may also be dispensed with since in appeals in labor
cases, non-service of copy of the appeal or appeal memorandum to the adverse party is not a jurisdictional defect
which calls for the dismissal of the appeal.
93
New Pacific
Jimenez
New Pacific Timber and Supply Co. vs. NLRC
GR No. 124224, March 17, 2000 (petition for relief treated as appeal)
Facts:
The NFL was the sole and exclusive bargaining representative for the rank and file employees of petitioner. NFL
started to negotiate for better terms and conditions of employment; which were met with resistance by Petitioner
Company. The NFL filed a complaint for ULP on the ground of refusal to bargain collectively. LA issued an order
declaring the company guilty of ULP and ordering the CBA proposals submitted by the NFL as the CBA between
parties. Later, 186 of private respondents claiming they were wrongfully excluded from the benefits under the CBA
filed a petition for relief. Petitioner asserts that private respondents are not parties to the agreement and may not
claim benefits thereunder. As for the CBA, petitioner maintains that the force and effect of the CBAs terms are
limited to only three years and cannot extend to terms and conditions which ceased to have force and effect.
Issue:
Whether NLRC committed grave abuse of discretion when it entertained the petition for relief filed by the private
respondents and treated it as an appeal, even if it was filed beyond the relementary period for filing an appeal
Ruling:
No. We find no grave abuse of discretion on the part of the NLRC, when it entertained the petition for relief filed by
the private respondents and treated it as an appeal. even if it was filed beyond the reglementary period for filing an
appeal. Ordinarily, once a judgment has become final and executory, it can no longer be disturbed, altered or
modified. However, a careful scrutiny of the facts and circumstances of the instant case warrants liberality in the
application of technical rules and procedure. It would be a greater injustice to deprive the concerned employees of
the monetary benefits rightly due them because of a circumstance over which they had no control.
The Supreme Court has allowed appeals from decisions of the labor arbiter to the NLRC, even if filed beyond the
reglementary period, in the interest of justice. Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in
the exercise of its appellate powers, "correct, amend or waive any error, defect or irregularity whether in substance
or in form." Further, Article 221 of the same provides that: "In any proceeding before the Commission or any of the
Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit
and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all
reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of
law or procedure, all in the interest of due process.
94
Auza
Carpio
95
Opinaldo
Carpio
96
New Pacific Timber
Carpio
97
Saint Louis Cobarrubias
Flores
98
SAntos
Flores
47

99
Semblante and Pilar
Flores
100
Intertanz
Flores
101
Maynilad
Flores
102
Sapitan
Flores
103
Andrew
Jurado
ANDREW JAMES MCBURNIE V. EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC.
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, 2013
Ponente. REYES, J
Facts: McBurnie, an Australian national, signed a five-year employment agreement5 with the company EGI as an
Executive Vice-President who shall oversee the management of the companys hotels and resorts within the
Philippines. When he figured in an accident that compelled him to go back to Australia while recuperating from his
injuries. While in Australia, he was informed by respondent Ganzon that his services were no longer needed
because their intended project would no longer push through. He instituted a complaint for illegal dismissal and
other monetary claims against the respondents. The respondents opposed and contended that their agreement was
to jointly invest in and establish a company for the management of hotels. They did not intend to create an
employer-employee relationship, and the execution of the employment contract that was being invoked by
McBurnie was solely for the purpose of allowing McBurnie to obtain an alien work permit in the Philippines. The
LA declared McBurnie as having been illegally dismissed from employment. The respondents appealed the LAs
Decision to the NLRC. They filed Motion to Reduce Bond, and posted an appeal bond in the amount of
P100,000.00 and contended that the monetary awards of the LA were null and excessive, allegedly with the
intention of rendering them incapable of posting the necessary appeal bond considering petitioner is a single
foreigner who had no work permit and who left the country for good one month after the purported
commencement of his employment" was a patent nullity and respondents lacked the capacity to pay the bond of
almost P60 Million due to business losses. The said motion was denied as well as their motion for reconsideration.
Petition for certiorari was filed and CA ruled that the NLRC committed grave abuse of discretion in immediately
denying the motion without fixing an appeal bond in an amount that was reasonable, as it denied the respondents
of their right to appeal from the decision of the LA.29 The CA explained that "(w)hile Art. 223 of the Labor Code
requiring bond equivalent to the monetary award is explicit, Section 6, Rule VI of the NLRC Rules of Procedure, as
amended, recognized as exception a motion to reduce bond upon meritorious grounds and upon posting of a bond
in a reasonable amount in relation to the monetary award.
Issue:
Whether
NLRC
erred
in
denying
the
motion
to
reduce
appeal
bond
by
respondents?
Ruling: The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards
from the decision of the Labor Arbiter. The word "only" in Section 6, Rule VI of the 2011 NLRC Rules of Procedure
makes it clear that the posting of a cash or surety bond by the employer is the essential and exclusive means by
which
an
employers
appeal
may
be
perfected.
The prevailing jurisprudence on the matter provides that the filing of a motion to reduce bond, coupled with
compliance with the two conditions emphasized in Garcia v. KJ Commercial for the grant of such motion, namely,
(1) a meritorious ground, and (2) posting of a bond in a reasonable amount, shall suffice to suspend the running of
the period to perfect an appeal from the labor arbiters decision to the NLRC. To require the full amount of the
bond within the 10-day reglementary period would only render nugatory the legal provisions which allow an
appellant to seek a reduction of the bond.
Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award may be perfected
only upon the posting of cash or surety bond. The Court, however, has relaxed this requirement under certain
exceptional circumstances in order to resolve controversies on their merits. These circumstances include: (1)
fundamental consideration of substantial justice; (2) prevention of miscarriage of justice or of unjust enrichment;
and (3) special circumstances of the case combined with its legal merits, and the amount and the issue involved.
Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as provided in Section 6,
Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that henceforth, the following
guidelines shall be observed:
(a) The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the following
conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;
(b) For purposes o compliance with condition no. (2), a motion shall be accompanied by the posting o a provisional
cash or surety bond equivalent to ten percent (10,) of the monetary award subject o the appeal, exclusive o damages
48

and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running o the 1 0-day reglementary period
to
perfect
an
appeal
from
the
labor
arbiter's
decision
to
the
NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final amount o
bond that shall be posted by the appellant, still in accordance with the standards o meritorious grounds and
reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount o the
provisional bond, the appellant shall be given a fresh period o ten 1 0) days from notice o the NLRC order within
which
to
perfect
the
appeal
by
posting
the
required
appeal
bond.
The Court ruled that conditions for the reduction of an appeal bond were duly satisfied by the respondents.
104
Rolando
Otsuka
105
Wilgen
Piedad
106
Banahaw
BANAHAW VS. CAYETANO
G.R. No. 171673 MAY 20, 2011
LEONARDO-DE CASTRO, J.:
Rigor
FACTS:
Respondents in the case at bar, Cayetano , and others (collectively, the DXWG personnel), are supervisory and
rank and file employees of the DXWG-Iligan City radio station which is owned by petitioner Banahaw Broadcasting
Corporation (BBC), a corporation managed by Intercontinental Broadcasting Corporation (IBC). The DXWG
personnel filed with the Sub-regional Arbitration Branch No. XI, Iligan City a complaint for illegal dismissal, unfair
labor practice, reimbursement of unpaid Collective Bargaining Agreement (CBA) benefits, and attorneys fees
against IBC and BBC. The labor arbiter rendered a decision in favor of the employees. A Motion to Dismiss,
Release, Waiver and Quitclaim, was jointly filed by IBC and the DXWG personnel based on the latters admission
that IBC is not their employer as it does not own DXWG-Iligan City. This was granted. BBC later on was held as the
person who must be the only liable. Both BBC and respondents appealed to the NLRC anew, for the insufficient
satisfaction of the awarded monetary worth to DXWG. The NLRC issued an Order denying the Motion for the
Recomputation of the Monetary Award. According to the NLRC, such recomputation would result in the premature
resolution of the issue raised on appeal. The NLRC ordered BBC to post the required bond within 10 days from
receipt of said Order, with a warning that noncompliance will cause the dismissal of the appeal for non-perfection.
Instead of complying with the Order to post the required bond, BBC filed a Motion for Reconsideration, alleging
this time that since it is wholly owned by the Republic of the Philippines, it need not post an appeal bond.
The NLRC dismissed the joint petition.
Upon review by Rule 65 to the Court of Appeals, it rendered the assailed Decision denying BBCs Petition for
Certiorari. The Court of Appeals held that BBC, though owned by the government, is a corporation with a
personality distinct from the Republic or any of its agencies or instrumentalities, and therefore do not partake in
the latters exemption from the posting of appeal bonds.
ISSUE: Whether or not BBC is exempt from posting an appeal bond?
RULING: NO.
As a general rule, the government and all the attached agencies with no legal personality distinct from the former
are exempt from posting appeal bonds, whereas government-owned and controlled corporations (GOCCs) are not
similarly exempted. This distinction is brought about by the very reason of the appeal bond itself: to protect the
presumptive judgment creditor against the insolvency of the presumptive judgment debtor. When the State
litigates, it is not required to put up an appeal bond because it is presumed to be always solvent. [36] This
exemption, however, does not, as a general rule, apply to GOCCs for the reason that the latter has a personality
distinct from its shareholders. Thus, while a GOCCs majority stockholder, the State, will always be presumed
solvent, the presumption does not necessarily extend to the GOCC itself. However, when a GOCC becomes a
government machinery to carry out a declared government policy, it becomes similarly situated as its majority
stockholder as there is the assurance that the government will necessarily fund its primary functions. Thus, a
GOCC that is sued in relation to its governmental functions may be, under appropriate circumstances, exempted
from
the
payment
of
appeal
fees.
In the case at bar, BBC was organized as a private corporation, sequestered in the 1980s and the ownership of
which was subsequently transferred to the government in a compromise agreement. Further, it is stated in its
Amended Articles of Incorporation that BBC has the following primary function:
To engage in commercial radio and television broadcasting, and for this purpose, to establish, operate and maintain
such stations, both terrestrial and satellite or interplanetary, as may be necessary for broadcasting on a network
49

wide
or
international
basis.
It is therefore crystal clear that BBCs function is purely commercial or proprietary and not governmental. As such,
BBC cannot be deemed entitled to an exemption from the posting of an appeal bond.
Consequently, the NLRC did not commit an error, and much less grave abuse of discretion, in dismissing the appeal
of BBC on account of non-perfection of the same. In doing so, the NLRC was merely applying Article 223 of the
Labor Code
The posting of the appeal bond within the period provided by law is not merely mandatory but jurisdictional. The
failure on the part of BBC to perfect the appeal thus had the effect of rendering the judgment final and executory.
In the case at bar, BBC already took a risk when it filed its Motion for the Recomputation of the Monetary Award
without posting the bond itself. The Motion for the Recomputation of the Monetary Award filed by BBC, like the
Motion for Extension to File the Appeal Bond in Lamzon, was itself tantamount to a motion for extension to perfect
the appeal, which is prohibited by the rules. The NLRC already exhibited leniency when, instead of dismissing the
appeal outright, it merely ordered BBC to post the required bond within 10 days from receipt of said Order, with a
warning that noncompliance will cause the dismissal of the appeal for non-perfection. When BBC further
demonstrated its unwillingness by completely ignoring this warning and by filing a Motion for Reconsideration on
an entirely new ground, the NLRC cannot be said to have committed grave abuse of discretion by making good its
warning to dismiss the appeal. Therefore, the Court of Appeals committed no error when it upheld the NLRCs
dismissal of petitioners appeal.
50

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