Pepsi Cola Distributors of the Philippines vs Hon.

Gal-Lang

G.R. No. 89621 September 24, 1991

FACTS:

Petitioners Pepsi Cola Distributors of the Philippines are employers of private

respondents Salvador Novilla et.al.
Private Respondents were suspended for their role in the alleged disposition of empty
Pepsi bottles.
Petitioner filed a criminal complaint (initially for theft but it was later substituted with
falsification of private documents) against private respondents.
After preliminary investigation, the complaint was dismissed. Thereafter, the
employment of private respondents was terminated.

Labor Arbiter:

Private respondents filed a complaint for illegal dismissal. LABOR ARBITER ruled in favor
of private respondents.

Regional Trial Court:

Private respondent filed a separate civil complaint for damages for malicious prosecution
against petitioner before the RTC Leyte branch.
Petitioner motioned to dismiss for lack of Jurisdiction. Respondent Judge ruled that the
regular courts had jurisdiction on the ground that the case was distinct from the pending
labor case in the NLRC.

Petitioners contention:

Under Article 217 (3), the labor arbiter has original and exclusive jurisdiction over money
claims of workers.
Contends that the regular courts have no jurisdiction.

ISSUE:

Is the case in question within the jurisdiction of the Labor Arbiter?

RULING:

No, the case in question is cognizable by the regular courts.

ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters
shall have the original and exclusive jurisdiction to hear and decide within thirty (30) working
days after submission of the case by the parties for decision, the following cases involving all
workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

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

3. All money claims of workers, including those based on non-payment or

underpayment of wages, overtime compensation, separation pay and other benefits
provided by law or appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity benefits; (Now subsection
6.)
 XXX

Not every controversy involving workers and their employers can be resolved only by the
labor arbiters.
There must be "reasonable causal connection" between the claim asserted and
employee-employer relations to put the case under the provisions of Article 217.
In the case of San Miguel Corporation v. NLRC, the court stated that:
o The character of the principal relief sought is essential.
o If the claim to the principal relief sought is to be resolved not by reference to
the Labor Code or other labor relations statute or a collective bargaining
agreement but by the general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to the Labor Arbiter and the
NLRC.
o The 'money claims of workers" referred to in paragraph 3 of Article 217
embraces money claims which arise out of or in connection with the
employer- employee relationship, or some aspect or incident of such
relationship.
In the case at bar, there is no "reasonable causal connection" between the complaint
and the relations of the parties as employer and employees.
The case in question involves a complaint for damages for malicious prosecution which
was filed in response to the earlier baseless criminal complaint filed against the private
respondents by petitioner.
The complaint did not arise from such relations and in fact could have arisen
independently of an employment relationship between the parties.
The order of Respondent Judge is AFFIRMED and the petition DENIED.

7K Corporation v Eddie Albarico

GR 182295, June 26, 2013, Sereno CJ.

FACTS

Petitioner, 7k Corporation is a company selling water purifiers. Private Respondent

Eddie Albarico was a regular employee of 7k Corporation.
On 1990 , he Started working as a salesman. He was regularized by good performance.
He was promoted several times as salesman, to senior sales representative and then acting
team field supervisor
On 1992, he was awarded the Presidents Trophy for being one of the countrys top
water purifier specialist distributors

On April 5, 1993 , Albarico was dismissed by 7k Corporation

Chief Operating Officer of 7K Corp terminated Albaricos employment allegedly for his
poor performance

NCMB
Albarico had stop reporting to work and submitted his money claims against 7k Corp
before NCMB
Submission Agreement dated April 19, 1993 Whether Albarico was entitled to the
payment of separation pay and the sales commission reserved for him by the corporation

Labor Arbiter (LA)

While pending case before NCMB Albarico filed a complaint for illegal dismissal with
money claims
LA decision was in favor of Albarico, who was awarded separation pay in lieu of
reinstatement, backwages and attys fees
NLRC
7k Corp appealed. NLRC ruled that the LAs Decision on the ground that it was vacated
for forum shopping because the NCMB arbitration case was pending

NCMB
7k Corp on September 17, 1997 , filed its position paper denying respondent was
terminated from work or illegally dismissed. He voluntarily stopped reporting for work
after receiving a verbal reprimand for his sales performance (he is guilty of abandoning
work).
Eddie Albarica made an oral manifestation that he was adopting the position paper he
submitted to the LA
On January 12, 2005 , 12 years after the filling of the NCMB case.
Counter-Manifestation it was likewise amendable to settling the dispute.
However, it was willing to pay only the separation pay and the sales commission
according the the Submission Agreement dated April 19, 1993
Manifestedd that he was willing to settle the case amicably with 7k Corp based in the
decision of LA ordering the payment of separation pay.

NCMB Voluntary Arbitrator

November 18, 2005 it rendered a decision finding 7k Corp liable for illegal dismissal
-Termination of Albarico by reason of alleged poor performance was found invalid
-It found that Albarico could not have abandoned his Job
-It found that the immediate filling of a complaint for illegal dismissal against the
employer, with a prayer for reinstatement showed that the employee was not
abandoning his work
-It found that it was dismissed without due process
Albarico was entitled for separation pay and backwages with attys fees

CA
7k Corp appealed imputing the Voluntary Arbitrator grave abuse of discretion amounting
to lack or excess of Jurisdiction for awarding backwages and attorneys fees to Albaricos
illegal dismissal
CA affirmed the decision of Voluntary Arbitrator, but eliminated the ward of Attys fees
for having been without factual, legal or equitable justification
7k Coprs Motion for Partial Reconsideration was denied

Petitioners Contentions to the SC

Claiming that under Art. 217 of the Labor Code, the original and exclusive
jurisdiction over termination disputes is lodged only with the Labor arbiter of NLRC
Argues that the Voluntary Arbiter, assuming it has jurisdiction, should have limited
his decision to the issue contained in the Submission Agreement of the parties
o Petitioner asserts that under Art 262, the jurisdiction of a Voluntary Arbitrator
is strictly limited to the issues that the parties may agree to submit
o It contends that the Voluntary Arbitrator exceeded his jurisdiction when he
resolved the issues
Argues that the CA wrongfully concluded because separation pay may in fact be
awarded even in circumstances in which there is no illegal dismissal

ISSUE: Was the voluntary arbitrator correct in assuming jurisdiction over the issue of
entitlement of the respondent Albarico to backwages on the basis of the formers finding
of illegal dismissal?

RULING.
YES.
Art 217, Labor code Jurisdiction of the LA and Comission Escept as otherwise
provided under this code, the LAW shall have shall have original and exclusive jurisdiction to
hear and decise, within 30 calendar days after the submission of the case by the parties fr
decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or nonagricultural: (2) Terminal disputes; (6)
Except claims foe Employees Compensation, Social Security, Medicare and Maternity
benefits, All other Claims Arising from ER-EE relations, including those persons in domestic or
household services, involving an amount exceeding P 5,000.00 regardless of Whether
accompanied with a claim for reinstatement.
Labor Code gives the LA exclusive and original jurisdiction over termination disputes.
Art. 217 states Except as otherwise provided under this code refers to the following
execptions: Art 217 (c) Jurisdiction of LA (c) Cases arising from the interpretation or
implementation of CBA and those arising from the interpretation or enforcement of company
procedure/policies shall be disposed of by the LA by referring the same to the grievance
Machinery and Voluntary Arbitrator as may be provided in said agreement
Art. 262 of the Labor Code Jurisdiction over other disputes. The Voluntary Arbitrators
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.
Eastern Paper Mills, inc v. NLRC holds that seaparation pay may also be awarded for
considerations of social justice, even if an employee has been terminated for just cause
other than serious misconduct or an act reflecting on moral character.
The court ruled that separation pay may be awarded if it has become an established
practice of the company to pay the said benefit to voluntarily resigning employees (Hinatuan
Mining Corp v. NLRC) or to those validly dismissed for non-membership in a union as required
in a closed-shop agreement (US lines , inc. v. Acting Minister of Labor)
Voluntary Arbitrator correctly assumed that the core issue behind the issue of
separation pay is the legality of the dismissal of Albarico
Sime Darby Pilipinas, Inc. v Deputy Administrator Magasin that a voluntary Arbitrator
has a plenary jurisdiction and Authority to interpret an agreement to arbitrate and to
determine the scope of his own authority when the said agreement is vague subject only, in a
proper case, to the certiorari jurisdiction of this court.
Voluntary Arbitrator may award backwages upon finding of illegal dismissal.
Backwages are awared on the ground of equity as a form of relief that restores the
income lost by the terminated employee by reason of his illegal dismissal.
Sime Darby Pilipinas, Inc. v Deputy Administrator Magasin ruled that although the
specific issue presented by the parties to the Voluntary Arbitrator was only th issue of
performance bonus, the latter had authority to determine not only the issues of W/N a
performance bonus was to be granted, but also the related question of the amount of the
bonus, were it to be granted
We held that the failure of the parties to limit the issues specifically to that which
was stated allowed the arbitrator to assume jurisdiction over the related issue.
Petition is Denied and CA is Affirmed

Kawachi vs Del Quero

Facts:

In an Affidavit-Complaint dated 14 August 2002, private respondent Dominie Del Quero

charged A/J Raymundo Pawnshop, Inc., Virgilio Kawachi and petitioner Julius Kawachi with
illegal dismissal, non-execution of a contract of employment, violation of the minimum wage
law, and non-payment of overtime pay. The complaint was filed before the National Labor
Relations Commission (NLRC)

It alleged that Virgilio Kawachi hired private respondent as a clerk of the pawnshop and
that on certain occasions, she worked beyond the regular working hours but was not paid the
corresponding overtime pay. The complaint also narrated an incident on 10 August 2002,
wherein petitioner Julius Kawachi scolded private respondent in front of many people about
the way she treated the customers of the pawnshop and afterwards terminated private
respondents employment without affording her due process

MeTC QUEZON CITY

 On 7 November 2002, private respondent Dominie Del Quero filed an action for damages
against petitioners Julius Kawachi and Gayle Kawachi before the MeTC of Quezon City. The
complaint for damages specifically sought the recovery of moral damages, exemplary
damages and attorneys fees.

RTC

Petitioners moved for the dismissal of the complaint on the grounds of lack of
jurisdiction and forum-shopping or splitting causes of action.

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

Issue: Does the Regular Courts have jurisdiction over the case?

Held:

No, Labor Arbiter has exclusive Jurisdiction. Article 217(a) of the Labor Code, as
amended, clearly bestows upon the Labor Arbiter original and exclusive jurisdiction over
claims for damages arising from employer-employee relations in other words, the Labor
Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also
damages governed by the Civil Code.

The 1999 case of San Miguel Corporation v. Etcuban developed the "reasonable causal
connection rule" that if there is a reasonable causal connection between the claim asserted
and the employer-employee relations, then the case is within the jurisdiction of our labor
courts. In the absence of such nexus, it is the regular courts that have jurisdiction.

In the instant case, the allegations in private respondents complaint for damages show
that her injury was the offshoot of petitioners immediate harsh reaction as her
administrative superiors to the supposedly sloppy manner by which she had discharged her
duties. Where the employer-employee relationship is merely incidental and the cause of
action proceeds from a different source of obligation, the Court has not hesitated to uphold
the jurisdiction of the regular courts. The scenario that obtains in this case is obviously
different. The allegations in private respondents complaint unmistakably relate to the
manner of her alleged illegal dismissal.

For a single cause of action, the dismissed employee cannot be allowed to sue in two
forums: one, before the labor arbiter for reinstatement and recovery of back wages or for
separation pay, upon the theory that the dismissal was illegal; and two, before a court of
justice for recovery of moral and other damages, upon the theory that the manner of
dismissal was unduly injurious or tortious. Suing in the manner described is known as
"splitting a cause of action," a practice engendering multiplicity of actions.

The NLRC has jurisdiction over private respondents complaint for illegal dismissal and
damages arising therefrom. She cannot be allowed to file a separate or independent civil
action for damages where the alleged injury has a reasonable connection to her termination
from employment. Consequently, the action for damages filed before the MeTC must be
dismissed.

CONTINENTAL MICRONESIA, INC. v. JOSEPH BASSO

G.R. Nos. 178382-83, September 23, 2015

Facts:
Petitioner Continental Micronesia, Inc. (CMI) is a foreign corporation organized and existing
under the laws of and domiciled in the United States of America (US). It is licensed to do
business in the Philippines. Basso, a US citizen, resided in the Philippines prior to his death.

Mr. Braden Managing Director-Asia of Continental Airlines (Continental), offered Basso the
position of General Manager of the Philippine Branch of Continental. Basso accepted the
offer.

It was not until much later that Mr. Braden, who had since returned to the US, sent Basso the
employment contract8 dated February 1, 1991, which Mr. Braden had already signed. Basso
then signed the employment contract and returned it to Mr. Braden as instructed.

CMI took over the Philippine operations of Continental, with Basso retaining his position as
General Manager.Basso received a letter from Mr. Schulz, who was then CMI's Vice President
of Marketing and Sales, informing Basso that he has agreed to work in CMI as a consultant on
an "as needed basis

Basso wrote another letter addressed to Ms. Woodward of CMI's Human Resources Department
inquiring about the status of his employment. Ms. Woodward responded that pursuant to the
employment contract dated February 1, 1991, Basso could be terminated at will upon a
thirty-day notice. Ms. Woodward also reminded Basso of the telephone conversation between
him, Mr. Schulz and Ms. Woodward where they informed him of the company's decision to
relieve him as General Manager. CMI offered Basso a severance pay, in consideration of the
Php1,140,000.00 housing advance that CMI promised him. 13

Basso filed a Complaint for Illegal Dismissal with Moral and Exemplary Damages against CMI
CMI filed a Motion on the ground of lack of jurisdiction over the person of CMI and the subject
matter of the controversy Labor Arbiter granted the Motion to Dismiss. Applying the doctrine
of lex loci contractus, the Labor Arbiter held that the terms and provisions of the
employment contract show that the parties did not intend to apply our Labor Code The Labor
Arbiter also held that no employer-employee relationship existed between Basso and the
branch office of CMI in the Philippines, but between Basso and the foreign corporation itself.

On appeal, the NLRC REMANDED the case to the Labor Arbiter for the determination of certain
facts to settle the issue on jurisdiction.

Labor Arbiter's Ruling:

Labor Arbiter dismissed the case for lack of merit and jurisdiction.
The Labor Arbiter agreed with CMI that the employment contract was xecuted in the US "since
the letter-offer was under the Texas letterhead and the acceptance of Complainant was
returned there." Thus, applying the doctrine of lex loci celebrationis, US laws apply. Also,
applying lex loci contractus, the Labor Arbiter ruled that the parties did not intend to apply
Philippine laws, thus:

NLRC's Ruling:
Reversed and Set aside LA ruling.
It ruled that the Labor Arbiter acquired jurisdiction over the case when CMI voluntarily
submitted to his office's jurisdiction.
On the merits, the NLRC agreed with the Labor Arbiter that Basso was dismissed for just and
valid causes on the ground of breach of trust and loss of confidence.

The Court of Appeal's Decision:

Denied and Dismissed Continentals petition.
Granted Bassos petition and declared the dismissal illegal.

Issue (1) Whether or not the court of appeals erred in ruling that the labor arbiter and the
nlrc had jurisdiction to hear and try the illegal dismissal case.
Held (1):
1. No. In Hasegawa v. Kitamura, we stated that in the judicial resolution of conflict-of-laws
problems, three consecutive phases are involved: jurisdiction, choice of law, and recognition
and enforcement of judgments. In resolving the conflicts problem, courts should ask the
following questions:
A. "Under the law, do I have jurisdiction over the subject matter and the parties to
this case?

B. "If the answer is yes, is this a convenient forum to the parties, in light of the facts?

C. "If the answer is yes, what is the conflicts rule for this particular problem?

D. "If the conflicts rule points to a foreign law, has said law been properly pleaded
and proved by the one invoking it?

E. "If so, is the application or enforcement of the foreign law in the forum one of the
basic exceptions to the application of foreign law? In short, is there any strong policy
or vital interest of the forum that is at stake in this case and which should preclude
the application of foreign law?

A. This case stemmed from an illegal dismissal complaint. The Labor Code, under Article
217, clearly vests original and exclusive jurisdiction to hear and decide cases
involving termination disputes to the Labor Arbiter. Hence, the Labor Arbiter and the
NLRC have jurisdiction over the subject matter of the case. As regards jurisdiction
over the parties, we agree with the Court of Appeals that the Labor Arbiter acquired
jurisdiction over the person of Basso, notwithstanding his citizenship, when he filed
his complaint against CMI. On the other hand, jurisdiction over the person of CMI was
acquired through the coercive process of service of summons. We note that CMI never
denied that it was served with summons

B. Under the doctrine of forum non conveniens, a Philippine court in a conflict-of-laws

case may assume jurisdiction if it chooses to do so, provided, that the following
requisites are met: (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. 46 All these requisites are present
here. Basso may conveniently resort to our labor tribunals as he and CMI lad physical
presence in the Philippines during the duration of the trial. CMI has a Philippine
branch, while Basso, before his death, was residing here. The labor tribunals can
make an intelligent decision as to the law and facts. The incident subject of this case
(i.e. dismissal of Basso) happened in the Philippines, the surrounding circumstances
of which can be ascertained without having to leave the Philippines

C. In Saudi Arabian Airlines v. Court of Appeals, we emphasized that an essential

element of conflict rules is the indication of a "test" or "connecting factor" or "point of
contact". Choice-of-law rules invariably consist of a factual relationship (such as
property right, contract claim) and a connecting fact or point of contact, such as
the situs of the res, the place of celebration, the place of performance, or the place
of wrongdoing. Pursuant to Saudi Arabian Airlines, we hold that the "test factors,"
"points of contact" or "connecting factors" in this case are the following:

(1) The nationality, domicile or residence of Basso;

(2) The seat of CMI;

(3) The place where the employment contract has been made, the locus actus;
 (4) The place where the act is intended to come into effect, e.g., the place of
performance of contractual duties;

(5) The intention of the contracting parties as to the law that should govern their
agreement, the lex loci intentionis; and

(6) The place where judicial or administrative proceedings are instituted or done.

Applying the foregoing in this case, we conclude that Philippine law the applicable
law. Basso, though a US citizen, was a resident here from the time he was hired by
CMI until his death during the pendency of the case. CMI, while a foreign corporation,
has a license to do business in the Philippines and maintains a branch here, where
Basso was hired to work. The contract of employment was negotiated in the
Philippines. A purely consensual contract, it was also perfected in the Philippines
when Basso accepted the terms and conditions of his employment as offered by CMI.
The place of performance relative to Biasso's contractual duties was in the
Philippines. The alleged prohibited acts of Basso that warranted his dismissal were
committed in the Philippines. Clearly, the Philippines is the state with the most
significant relationship to the problem. Thus, we hold that CMI and Basso intended
Philippine law to govern, notwithstanding some references made to US laws and the
fact that this intention was not expressly stated in the contract. If the foreign law is
not properly pleaded or proved, the presumption of identity or similarity of the
foreign law to our own laws, otherwise known as processual presumption, applies.
Here, US law may have been properly pleaded but it was not proved in the labor
tribunals.

ISSUE (2). Whether or not the court of appeals erred in finding that basso was not validly
dismissed on the ground of loss of trust or confidence

HELD.(2)
No. Basso was illegally dismissed. The dismissal of Basso was not founded on clearly
established facts and evidence sufficient to warrant dismissal from employment. While proof
beyond reasonable doubt is not required to establish loss of trust and confidence, substantial
evidence is required and on the employer rests the burden to establish it. There must be
some basis for the loss of trust, or that the employer has reasonable ground to believe that
the employee is responsible for misconduct, which renders him unworthy of the trust and
confidence demanded by his position. We find that CMI failed to discharge its burden to prove
the above acts. CMI merely submitted affidavits of its officers, without any other
corroborating evidence

GILDA LUNZAGA v. ALBAR SHIPPING AND TRADING CORP

GR. 200476, April 18, 2012

FACTS
Romeo Lunzaga was a seaman working for Albar Shipping. On June 11, 2008, Romeo was
assigned asChief Engineer on board Albars Philippine Vessel MV Lake Aru. One month later,
Romeo suffered a heart attack and was repatriated to the Philippines only to die on
September 5, 2008.
Sometime in early 2009, Gilda, claiming to be the surviving spouse of Romeo, filed with
the NLRC a complaint against Albar Shipping for payment of death benefits, damages and
attorney;s fees. It should be noted that Gilda was the designated heir in Romeos overseas
Filipino worker Verification Sheet and Philhealth Information Sheet.
 The Lunzaga sibling, claimed that Gilda is not entitled to the death benefits of Romeo, as
she had a subsisting marriage when she married him. They claim that her marriage with
romeo was, therefore, bigamous.
During the mandatory conferences of the parties before the LA, Albar Shipping signified
its willingness to pay Romeos death benefits in the amount of USD 55,547.44. However, Gilda
and the Lunzaga siblings could not agree as to the sharing of the benefits.

LA Ruling:
The Labor Arbiter issued an Order temporarily dismissing the complaint and directing the
parties to file their case with the regular courts.
Gilda appealed to the NLRC, however, the same was made one day past the 10 day period
for filing an appeal from the decision of the Labor Arbiter.

NLRC Ruling:
Petition was dismissed for filing beyond the reglamentary period.

CA Ruling.
CA affirmed the NLRC decision.
CA ruled that despite the fact that the appeal to the NLRC was filed only one day beyond
the reglamentary period, Gilda failed to present any reason for the liberal application of the
rule on filing appeals.

ISSUE: Did the NLRC and the CA err in giving due course to the appeal due to one day delay of
its filing?

Held.
Yes. Considering that the issue on whether the heirs of Romeo are entitled to receive his
death benefits from Albar Shipping properly falls under the jurisdiction of the LA, the NLRC
and the CA should have had relaxed the rigid application of the rules of procedure to afford
the parties the opportunity to fully ventitlate their cases on the merits.
This is in line with the time honored principle that cases should be decided only after
giving all parties the chance to argue their causes and defenses. Technicality and procedural
imperfections should not serve as bases for decisions.
In that way, the ends of justice to the rival claims of contending parties, bearing always
in mind the procedure is not a hindrance but promotes the administration of justice.

G.R. No. 211588. September 9, 2015.]

WORLD'S BEST GAS, INC., vs. HENRY VITAL, joined by his wife
FLOSERFINA VITAL,

G.R. No. 211588. September 9, 2015

FACTS
Henry Vital was one of the incorporators of Worlds Best Gas Inc. (WBGI), holding
P500,000.00 worth of shares of stocks therein. As a separate business venture, Vital and
his wife, respondent Floserfina Vital (respondents), sourced Liquefied
Petroleum Gas (LPG) from WBGI and distributed the same through ERJ Enterprises owned
by them. As of respondents' last statement of account, their outstanding balance with
WBGI for unpaid LPG amounted to P923,843.59.
On January 6, 1999, Vital was appointed as Internal Auditor and Personnel
Manager by WBGI's President/CEO and continued to serve as such until his mandatory
retirement on September 25, 2003.
Upon his retirement, WBGI's Board of Directors computed Vital's retirement
benefits at P82,500.00 by multiplying his P15,000.00 monthly pay by 5.5 years, which
was the number of years he served as Internal Auditor and Personnel Manager. WBGI also
agreed to acquire Vital's P500,000.00 shares of stocks at par value.
After offsetting the P500,000.00 due from WBGI's acquisition of his shares of
stocks against ERJ Enterprises' P923,843.59 outstanding balance to WBGI, Vital claimed
that the unpaid salaries and separation pay due him amounted to P845,000.00 and
P250,000.00, respectively, leaving a net amount of P671,156.41 payable to him. WBGI
rejected Vital's claim and contended that after offsetting, Vital actually owed it
P369,156.19.
Vital filed a complaint before NLRC for non-payment of separation and retirement
benefits, underpayment of salaries/wages and 13th month pay, illegal reduction of
salary and benefits, and damages.

PETITIONERS CONTENTION
WBGI averred that the Labor Arbiter (LA) had no jurisdiction over the complaint
because Vital is not an employee, but a mere incorporator and stockholder of WBGI, hence,
no employer-employee relationship exists between them. AIDSTE

LA Ruling
LA found that the issues between Vital and WBGI are intra-corporate in nature as
they arose between the relations of a stockholder and the corporation, and not from an
employee and employer relationship. Thus, the LA dismissed the case for lack of
jurisdiction.
RTC Ruling
Acting as a special commercial court, found that Vital was an employee of WBGI
and thereby, upheld his claim of P845,000.00 and P250,000.00 in unpaid salaries and
separation pay.
However, the RTC offset these amounts, including the P500,000.00 due from
WBGI's acquisition of Vital's shares of stocks, against the P923,843.59 payable to WBGI
from ERJ Enterprises, thus, awarding Vital the net amount of P671,156.41, with legal
interest from date of demand until full payment, P50,000.00 as attorney's fees and costs
of suit plus litigation expenses.

RTCS RATIO: since the positions of Internal Auditor and Personnel Manager were not
provided for in WBGI's By-Laws, Vital was not a corporate officer but an employee entitled
to employment benefits.

CA Ruling
 CA dismissed the appeal. MFR denied.

ISSUE:

The Issue before the Court

Does the RTC have jurisdiction over the issue Vital's claim of P845,000.00 and P250,000.00
in unpaid salaries and separation pay?
HELD. NO.
RTC has no subject matter jurisdiction to resolve claims arising from
employer-employee relations, the RTC's ruling on Vital's claim of P845,000.00 and
P250,000.00 in unpaid salaries and separation pay is, thus, null and void.
RTC's adjudication of Vital's claim for P845,000.00 and P250,000.00 in unpaid
salaries and separation pay was improper since the same is one which arose from Vital
and WBGI's employer-employee relations, involving an amount exceeding P5,000.00,
hence, belonging to the jurisdiction of the labor arbiters pursuant to Article 217 of
the Labor Code:
Art. 217. Jurisdiction of the 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 decide,
within thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms
of damages arising from the employer-employee
relations;
5. Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of strikes
and lockouts; and acEHCD
6. Except claims for Employees' Compensation, Social
Security, Medicare and maternity benefits, all other
claims arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P5,000.00)regardless of whether accompanied
with a claim for reinstatement.
xxx xxx xxx
Having no subject matter jurisdiction to resolve claims arising from
employer-employee relations, the RTC's ruling on Vital's claim of P845,000.00 and
P250,000.00 in unpaid salaries and separation pay is, thus, null and void, and therefore,
cannot perpetuate even if affirmed on appeal, 26 rendering the CA's ratiocination that it
"has the eventual authority to review the labor courts' decision on the matter" 27 direly
infirm. As a result, WBGI's petition is meritorious on this score. However, since the
dismissal is grounded on lack of jurisdiction, then the same should be considered as a
 dismissal without prejudice. 28 As such, Vital may re-file 29 the same claim, including
those related thereto (e.g., moral and exemplary damages, and, attorney's fees)
before the proper labor tribunal.
Contrary to its lack of jurisdiction over claims arising from employer-employee
relations, the RTC has: (a) general jurisdiction to adjudicate on the P923,843.59 in
arrearages payable to WBGI from ERJ Enterprises, which was admitted by Vital but
not claimed by WBGI; 30 and (b) special jurisdiction, as a special commercial court, to
adjudicate on Vital's claim of P500,000.00 from WBGI's acquisition of his shares of
stocks. 31 Indeed, even acting as a special commercial court, the RTC's general
jurisdiction to adjudicate on the first-mentioned claim is retained.
With the RTC's jurisdiction established over the above-mentioned causes of
action, Vital's claim of P500,000.00 due from WBGI's acquisition of his shares of stocks
should therefore be offset against the P923,843.59 in arrearages payable to WBGI by
ERJ Enterprises owned by respondents, as prayed for by him. Hence, no amount can be
adjudicated in Vital's favor, since it is the respondents who, after due computation,
would be left liable to WBGI in the net amount of P423,843.59. This notwithstanding,
WBGI cannot recover this latter amount in this case since it never interposed a
permissive counterclaim therefor in its answer. 32 It is well-settled that courts cannot
grant a relief not prayed for in the pleadings or in excess of what is being sought by the
party. 33 WBGI may, however, opt to file a separate collection suit, including those
related thereto (e.g., moral and exemplary damages, and attorney's fees), to recover
such sum.
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated September
30, 2013 and the Resolution dated March 4, 2014 of the Court of Appeals in CA-G.R. SP
No. 123497 are hereby SET ASIDE. A new one is entered:
(a) DISMISSING respondent Henry Vital's (Vital) labor claims of P845,000.00 and
P250,000.00 in unpaid salaries and separation pay against petitionerWorld's Best Gas,
Inc.'s (WBGI), WITHOUT PREJUDICE as stated in this Decision; and HSAcaE
(b) RECOGNIZING WBGI's liability to Vital in the amount of P500,000.00 due from
the acquisition of his shares of stocks. This amount is, however, OFFSETagainst the
P923,843.59 in arrearages payable to WBGI by ERJ Enterprises owned by Vital and his
wife, respondent Floserfina Vital, leaving a net amount of P423,843.59, which WBGI may
claim in a separate case as stated in this Decision.
SO ORDERED.
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