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G.R. No. 89621 September 24, 1991 - PEPSI COLA DISTRIBUTORS OF THE PHIL., INC., ET AL. v. LOLITA O. GAL-LANG, ET AL. : SEPTEMB

FIRSTDIVISION
[G.R.No.89621.September24,1991.]
PEPSICOLADISTRIBUTORSOFTHEPHILIPPINES,INC.,representedbyitsPlantGeneralManager
ANTHONYB.SIAN,ELEAZARLIMBAB,IRENEOBALTAZAR&JORGEHERAYA,Petitioners,v.HON.LOLITA
O.GALLANG,SALVADORNOVILLA,ALEJANDROOLIVA,WILFREDOCABAAS&FULGENCIO
LEGO,Respondents.
AurelioD.Menzon,forPetitioners.
MarioP.Nicolasoracocounsel,forPetitioners.
PapianoL.SantoforPrivateRespondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION LABOR ARBITER SCOPE OF POWER RULE. It must be stressed that not
every controversy involving workers and their employers can be resolved only by the labor arbiters. This will be so
onlyifthereisa"reasonablecausalconnection"betweentheclaimassertedandemployeeemployerrelationstoput
thecaseundertheprovisionsofArticle217.Absentsuchalink,thecomplaintwillbecognizablebytheregularcourts
ofjusticeintheexerciseoftheircivilandcriminaljurisdiction.
2. REMEDIAL LAW CIVIL PROCEDURE COMPLAINT FOR DAMAGE FOR MALICIOUS PROSECUTION FILED BY
EMPLOYEESAGAINSTEMPLOYERSCOGNIZABLEBYREGULARCOURTSOFJUSTICECASEATBAR.Thecasenow
beforetheCourtinvolvesacomplaintfordamagesformaliciousprosecutionwhichwasfiledwiththeRegionalTrial
Court of Leyte by the employees of the defendant company. It does not appear that there is a "reasonable causal
connection" between the complaint and the relations of the parties as employer and employees. The complaint did
notarisefromsuchrelationsandinfactcouldhavearisenindependentlyofanemploymentrelationshipbetweenthe
parties. No such relationship or any unfair labor practice is asserted. What the employees are alleging is that the
petitioners acted with bad faith when they filed the criminal complaint which the Municipal Trial Court said was
intended"toharassthepooremployee"andthedismissalofwhichwasaffirmedbytheProvincialProsecutor"forlack
of evidence to establish even a slightest probability that all the respondents herein have committed the crime
imputedagainstthem."Thisisamatterwhichthelaborarbiterhasnocompetencetoresolveastheapplicablelawis
nottheLaborCodebuttheRevisedPenalCode.

DECISION

CRUZ,J.:

ThequestionnowbeforeushasbeencategoricallyresolvedinearlierdecisionsoftheCourtthatalittlemorediligent
researchwouldhavedisclosedtothepetitioners.Onthebasisofthosecasesandthefactsnowbeforeus,thepetition
mustbedenied.
chanrobles.com.ph:virtuallawlibrary

The private respondents were employees of the petitioner who were suspected of complicity in the irregular
dispositionofemptyPepsiColabottles.OnJuly16,1987,thepetitionersfiledacriminalcomplaintfortheftagainst
thembutthiswaslaterwithdrawnandsubstitutedwithacriminalcomplaintforfalsificationofprivatedocuments.On
November26,1987,afterapreliminaryinvestigationconductedbytheMunicipalTrialCourtofTanauan,Leyte,the
complaintwasdismissed.ThedismissalwasaffirmedonApril8,1988,bytheOfficeoftheProvincialProsecutor.
Meantime, allegedly after an administrative investigation, the private respondents were dismissed by the petitioner
company on November 23, 1987. As a result, they lodged a complaint for illegal dismissal with the Regional
ArbitrationBranchoftheNLRCinTaclobanCityonDecember1,1987,anddemandedreinstatementwithdamages.
Inaddition,theyinstitutedintheRegionalTrialCourtofLeyte,onApril1988,aseparatecivilcomplaintagainstthe
petitionersfordamagesarisingfromwhattheyclaimedtobetheirmaliciousprosecution.
The petitioners moved to dismiss the civil complaint on the ground that the trial court had no jurisdiction over the
case because it involved employeeemployer relations that were exclusively cognizable by the labor arbiter. The
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motionwasgrantedonFebruary6,1989.OnJuly6,1989,however,therespondentjudge,actingonthemotionfor
reconsideration,reinstatedthecomplaint,sayingitwas"distinctfromthelaborcasefordamagesnowpendingbefore
thelaborcourts."ThepetitionersthencametothisCourtforrelief.
ThepetitionersinvokeArticle217oftheLaborCodeandanumberofdecisionsofthisCourttosupporttheirposition
that the private respondents civil complaint for damages falls under the jurisdiction of the labor arbiter. They
particularlycitethecaseofGetzCorporationv.CourtofAppeals,1whereitwasheldthatacourtoffirstinstancehad
nojurisdictionoverthecomplaintfiledbyadismissedemployee"forunpaidsalaryandotheremploymentbenefits,
terminationpayandmoralandexemplarydamages."
cralawvirtua1awlibrary

We hold at the outset that the case is not in point because what was involved there was a claim arising from the
alleged illegal dismissal of an employee, who chose to complain to the regular court and not to the labor arbiter.
Obviously,theclaimarosefromemployeeemployerrelationsandsocameunderArticle217oftheLaborCodewhich
thenprovidedasfollows:
chanrob1esvirtual1awlibrary

ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters shall have the original and
exclusivejurisdictiontohearanddecidewithinthirty(30)workingdaysaftersubmissionofthecasebytheparties
fordecision,thefollowingcasesinvolvingallworkers,whetheragriculturalornonagricultural:
chanrob1esvirtual1awlibrary

1.Unfairlaborpracticecases
2.Thosethatworkersmayfileinvolvingwages,hoursofworkandothertermsandconditionsofemployment
3. All money claims of workers, including those based on nonpayment or underpayment of wages, overtime
compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for
employeescompensation,socialsecurity,medicareandmaternitybenefits
4.Casesinvolvinghouseholdservicesand
5.CasesarisingfromanyviolationofArticle265ofthisCode,includingquestionsinvolvingthelegalityofstrikesand
lockouts.
(b)TheCommissionshallhaveexclusiveappellatejurisdictionoverallcasesdecidedbyLaborArbiters.2
It must be stressed that not every controversy involving workers and their employers can be resolved only by the
labor arbiters. This will be so only if there is a "reasonable causal connection" between the claim asserted and
employeeemployer relations to put the case under the provisions of Article 217. Absent such a link, the complaint
willbecognizablebytheregularcourtsofjusticeintheexerciseoftheircivilandcriminaljurisdiction.
In Medina v. CastroBartolome, 3 two employees filed in the Court of First Instance of Rizal a civil complaint for
damagesagainsttheiremployerforslanderousremarksmadeagainstthembythecompanypresident.Ontheorder
dismissingthecasebecauseitcameunderthejurisdictionofthelaborarbiters,JusticeVicenteAbadSantossaidfor
theCourt:
chanrob1esvirtual1awlibrary

Itisobviousfromthecomplaintthattheplaintiffshavenotallegedanyunfairlaborpractice.Theirsisasimpleaction
fordamagesfortortuousactsallegedlycommittedbythedefendants.Suchbeingthecase,thegoverningstatuteis
theCivilCodeandnottheLaborCode.Itresultsthattheordersunderreviewarebasedonawrongpremise.
chanrobles.com.ph:virtuallawlibrary

InSingaporeAirlinesLtd.v.Pao,4wheretheplaintiffwassuingfordamagesforallegedviolationbythedefendant
ofan"AgreementforaCourseofConversionTrainingattheExpenseofSingaporeAirlinesLimited,"thejurisdiction
oftheCourtofFirstInstanceofRizaloverthecasewasquestioned.TheCourt,citingtheearliercaseofQuisabav.
Sta.InesMelaleVeneerandPlywood,Inc.,5declaredthroughJusticeHerrera:
chanrob1esvirtual1awlibrary

Stateddifferently,petitionerseeksprotectionunderthecivillawsandclaimsnobenefitsundertheLaborCode.The
primaryreliefsoughtisforliquidateddamagesforbreachofacontractualobligation.Theotheritemsdemandedare
notlaborbenefitsdemandedbyworkersgenerallytakencognizanceofinlabordisputes,suchaspaymentofwages,
overtimecompensationorseparationpay.Theitemsclaimedarethenaturalconsequencesflowingfrombreachofan
obligation,intrinsicallyacivildispute.
InMolaveSales,Inc.v.Laron,6thesameJusticeheldfortheCourtthattheclaimoftheplaintiffagainstitssales
managerforpaymentofcertainaccountspertainingtohispurchaseofvehiclesandautomotiveparts,repairsofsuch
vehicles, and cash advances from the corporation was properly cognizable by the Regional Trial Court of Dagupan
Cityandnotthelaborarbiter,because"althoughacontroversyisbetweenanemployerandanemployee,theLabor
ArbitershavenojurisdictioniftheLaborCodeisnotinvolved."
cralawvirtua1awlibrary

ThelatestrulingonthisissueisfoundinSanMiguelCorporationv.NLRC,7wheretheabovecasesarecitedandthe
changesinArticle217arerecounted.ThatcaseinvolvedaclaimofanemployeeforaP60,000.00prizeforaproposal
madebyhimwhichheallegedhadbeenacceptedandimplementedbythedefendantcorporationintheprocessingof
oneofitsbeerproducts.Theclaimwasfiledwiththelaborarbiter,whodismisseditforlackofjurisdictionbutwas
reversed by the NLRC on appeal. In setting aside the appealed decision and dismissing the complaint, the Court
observedthroughJusticeFeliciano:
chanrob1esvirtual1awlibrary

Itisthecharacteroftheprincipalreliefsoughtthatappearsessential,inthisconnection.Wheresuchprincipalrelief
is to be granted under labor legislation or a collective bargaining agreement, the case should fall within the
jurisdictionoftheLaborArbiterandtheNLRC,eventhoughaclaimfordamagesmightbeassertedasanincidentto
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suchclaim.
xxx
Where the claim to the principal relief sought is to be resolved not by reference to the Labor Code or other labor
relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute
belongstotheregularcourtsofjusticeandnottotheLaborArbiterandtheNLRC.Insuchsituations,resolutionof
the dispute requires expertise, not in labor management relations nor in wage structures and other terms and
conditionsofemployment,butratherintheapplicationofthegeneralcivillaw.Clearly,suchclaimsfalloutsidethe
area of competence or expertise ordinarily ascribed to Labor Arbiters and the NLRC and the rationale for granting
jurisdictionoversuchclaimstotheseagenciesdisappears.
xxx
While paragraph 3 above refers to "all money claims of workers," it is not necessary to suppose that the entire
universe of money claims that might be asserted by workers against their employers has been absorbed into the
originalandexclusivejurisdictionofLaborArbiters.
xxx
For it cannot be presumed that money claims of workers which do not arise out of or in connection with their
employeremployeerelationship,andwhichwouldthereforefallwithinthegeneraljurisdictionoftheregularcourtsof
justice,wereintendedbythelegislativeauthoritytobetakenawayfromthejurisdictionofthecourtsandlodgedwith
LaborArbitersonanexclusivebasis.TheCourt,therefore,believesandsoholdsthatthe"moneyclaimsofworkers"
referred to in paragraph 3 of Article 217 embraces money claims which arise out of or in connection with the
employeremployeerelationship,orsomeaspectorincidentofsuchrelationship.Putalittledifferently,thatmoney
claims of workers which now fall within the original and exclusive jurisdiction of Labor Arbiters are those money
claimswhichhavesomereasonablecausalconnectionwiththeemployeremployeerelationship(Ibid.).
ThecasenowbeforetheCourtinvolvesacomplaintfordamagesformaliciousprosecutionwhichwasfiledwiththe
Regional Trial Court of Leyte by the employees of the defendant company. It does not appear that there is a
"reasonablecausalconnection"betweenthecomplaintandtherelationsofthepartiesasemployerandemployees.
The complaint did not arise from such relations and in fact could have arisen independently of an employment
relationship between the parties. No such relationship or any unfair labor practice is asserted. What the employees
are alleging is that the petitioners acted with bad faith when they filed the criminal complaint which the Municipal
Trial Court said was intended "to harass the poor employees" and the dismissal of which was affirmed by the
Provincial Prosecutor "for lack of evidence to establish even a slightest probability that all the respondents herein
have committed the crime imputed against them." This is a matter which the labor arbiter has no competence to
resolveastheapplicablelawisnottheLaborCodebuttheRevisedPenalCode.
chanrobleslawlibrary:rednad

"Talents differ, all is well and wisely put," so observed the philosopherpoet. 8 So it must be in the case we here
decide.
WHEREFORE,theorderdatedJuly6,1989,isAFFIRMEDandthepetitionDENIED,withcostsagainstthepetitioner.
SOORDERED.
Narvasa,GrioAquinoandMedialdea,JJ.,concur.
Endnotes:

1.116SCRA86.
2.ThishassincebeenamendedbySec.9,R.A.6715,effectiveMarch21,1989,toreadasfollows:

chanrob1esvirtual1awlibrary

ART.217.JurisdictionofLaborArbitersandtheCommission.(a)Exceptasotherwiseprovidedunder
this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide within
thirty(30)calendardaysafterthesubmissionofthecasebythepartiesfordecisionwithoutextension,
even in the absence of stenographic notes, the following cases involving all workers, whether
agriculturalornonagricultural:
chanrob1esvirtual1awlibrary

1.Unfairlaborpracticecases
2.Terminationdisputes
3.Ifaccompaniedwithaclaimforreinstatement,thosecasesthatworkersmayfileinvolvingwages,
ratesofpay,hoursofworkandothertermsandconditionsofemployment
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer
employeerelations
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5.CasesarisingfromanyviolationofArticle264ofthisCode,includingquestionsinvolvingthelegality
ofstrikeandlockoutsand
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all
other claims, arising from employeremployee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of
whetheraccompaniedwithaclaimforreinstatement.
(b)TheCommissionshallhaveexclusiveappellatejurisdictionoverallcasesdecidedbyLaborArbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and
thosearisingfromtheinterpretationorenforcementofcompanypersonnelpoliciesshallbedisposedof
by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as
maybeprovidedinsaidagreements.
3.116SCRA597.
4.122SCRA671.
5.58SCRA771.
6.129SCRA719.
7.161SCRA719.
8."TheMountainandtheSquirrel,"byRalphWaldoEmerson.

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