HALAGUENA vs. PHILIPPINE AIRLINES INC.

FACTS:
Patricia Halagueña, et. al, (Halagueña) are flight attendants employed by Philippine Airlines Inc.
(PAL) as well as members of Flight Attendants and Stewards Association of the Philippines (FASAP),
the exclusive bargaining agent of flight attendants, flight stewards and pursers of PAL Halagueña
assails Sec. 144 of the CBA entered into by PAL-FASAP and FASAP, which provides for a younger
retirement age for female cabin attendants than those of their male counterparts, to be
unconstitutional.
Due to Halagueña’s claim, Robert D. Anduiza, President of FASAP submitted their 2004-2005 CBA
proposals and manifested their willingness to commence the collective bargaining negotiations
between the management and the association, at the soonest possible time. Halagueña also filed
before the RTC of Makati, Branch 147 a Special Civil Action for Declaratory Relief with Prayer for the
Issuance of Temporary Restraining Order and Writ of Preliminary Injunction against PAL for the
invalidity of the assailed provision of the CBA. The RTC eventually granted such petition.
Aggrieved, PAL, filed a Petition for Certiorari and Prohibition with Prayer for a Temporary
Restraining Order and Writ of Preliminary Injunction with the Court of Appeals praying that the
order of the RTC, which denied its objection to its jurisdiction, be annulled and set aside for having
been issued without and/or with grave abuse of discretion amounting to lack of jurisdiction. The CA
granted PAL’s petition on the ground that the RTC has no jurisdiction over a labor dispute.
Hence the case at bar.
Issue:
Whether or not the regular courts has jurisdiction over the case.
Ruling:
Yes. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC.
Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals. Not every
controversy or money claim by an employee against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the
employer-employee relationship is merely incidental and the cause of action precedes from a
different source of obligation is within the exclusive jurisdiction of the regular court. Being an
ordinary civil action, the same is beyond the jurisdiction of labor tribunals.The said issue cannot be
resolved solely by applying the Labor Code. Rather, it requires the application of the Constitution,
labor statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination
Against Women, and the power to apply and interpret the constitution and CEDAW is within the
jurisdiction of trial courts, a court of general jurisdiction. In GeorgGrotjahn GMBH & Co. v. Isnani, this
Court held that not every dispute between an employer and employee involves matters that only
labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers.
The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to
dispute arising from an employer-employee relationship which can only be resolved by reference to
the Labor Code other labor statutes, or their collective bargaining agreement.
 PORTILLO v. RUDOLF LIETZ, INC., RUDOLF LIETZ and COURT OF APPEALS
FACTS:
In a letter agreement, signed by individual respondent Rudolf Lietz and conformed to by Portillo, the
latter (Portillo) was hired by the former under the conditions that Portillo “will not engage in any
other gainful employment by [her]self or with any other company either directly or indirectly
without written consent of [Lietz Inc.]” and “a breach of which will render [Portillo] liable to [Lietz
Inc.] for liquidated damages.”
On her tenth (10th) year of service with Lietz Inc., Portillo was promoted to Sales Representative. In
this regard, Portillo signed another letter agreement containing a "Goodwill Clause:"
“It remains understood and you agreed that, on the termination of your employment by act
of either you or [Lietz Inc.], and for a period of three (3) years thereafter, you shall not engage
directly or indirectly as employee, manager, proprietor, or solicitor for yourself or others in a
similar or competitive business or the same character of work which you were employed by
[Lietz Inc.] to do and perform. Should you breach this good will clause of this Contract, you shall
pay [Lietz Inc.] as liquidated damages the amount of 100% of your gross compensation over the
last 12 months, it being agreed that this sum is reasonable and just.”
Three (3) years thereafter Portillo resigned from Lietz Inc. During her exit interview, Portillo
declared that she intended to engage in business—a rice dealership, selling rice in wholesale.
On 15 June 2005, Lietz Inc. accepted Portillo’s resignation and reminded her of the "Goodwill Clause"
in the last letter agreement she had signed. Subsequently, Lietz Inc. learned that Portillo had been
hired by Ed Keller Philippines, Limited to head its Pharma Raw Material Department. Ed Keller
Limited is purportedly a direct competitor of Lietz Inc.
Meanwhile, Portillo’s demands from Lietz Inc. for the payment of her remaining salaries and
commissions went unheeded.
On 14 September 2005, Portillo filed a complaint with the NLRC for non-payment of 1½ months’
salary, two (2) months’ commission, 13th month pay, plus moral, exemplary and actual damages and
attorney’s fees. In its position paper, Lietz Inc. admitted liability for Portillo’s money claims in the
total amount of P110,662.16. However, Lietz Inc. raised the defense of legal compensation: Portillo’s
money claims should be offset against her liability to Lietz Inc. for liquidated damages in the amount
of ₱869,633.097 for Portillo’s alleged breach of the "Goodwill Clause" in the employment contract
when she became employed with Ed Keller Philippines, Limited.
On 25 May 2007, the Labor Arbiter granted Portillo’s complaint, ordering Lietz, Inc. to pay Portillo
the amount of Php110,662.16, representing her salary and commissions, including 13th month
pay.On appeal by respondents Lietz Inc., the NLRC affirmed the ruling of the Labor Arbiter. The
motion for reconsideration was denied by NLRC.
Lietz Inc. filed a petition for certiorari before the Court of Appeals, alleging grave abuse of discretion
in the labor tribunals’ rulings. The CA initially affirmed the labor tribunals, but on motion for
reconsideration, modified its previous decision. While upholding the monetary award in favor of
Portillo in the aggregate sum of ₱110,662.16, the CA allowed legal compensation or set-off of such
award of monetary claims by her liability to Lietz Inc. for liquidated damages arising from her
violation of the "Goodwill Clause" in her employment contract with them.10 Portillo’s motion for
reconsideration was denied.
Hence, this petition for certiorari before the SC.

ISSUE:
Whether Portillo’s money claims for unpaid salaries may be offset against Lietz Inc.’s claim for
liquidated damages.
RULING:
Paragraph 4 of Article 217 of the Labor Code appears to have caused the reliance by the CA on the
"causal connection between Portillo’s monetary claims against respondents and the latter’s claim
from liquidated damages against the former."
Art. 217. Jurisdiction of Labor Arbiters and the Commission. – (a) Except as otherwise provided under
this code, the 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 case involving all workers, whether
agricultural or nonagricultural:
Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;
- Evidently, the CA is convinced that the claim for liquidated damages emanates from the
"Goodwill Clause of the employment contract and, therefore, is a claim for damages arising
from the employer-employee relations."
- As early as Singapore Airlines Limited v. Paño, we established that not all disputes between
an employer and his employee(s) fall within the jurisdiction of the labor tribunals. We
differentiated between abandonment per se and the manner and consequent effects of such
abandonment and ruled that the first, is a labor case, while the second, is a civil law case.
- Stated differently, petitioner seeks protection under the civil laws and claims no benefits
under the Labor Code. The primary relief sought is for liquidated damages for breach of a
contractual obligation. The other items demanded are not labor benefits demanded by
workers generally taken cognizance of in labor disputes, such as payment of wages, overtime
compensation or separation pay. The items claimed are the natural consequences flowing
from breach of an obligation, intrinsically a civil dispute
- Subsequent rulings amplified the teaching in Singapore Airlines. The reasonable causal
connection rule was discussed.
Thus, in San Miguel Corporation v. National Labor Relations Commission, we held:
“The Court, therefore, believes and so holds that 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. Put a little
differently, that money claims of workers which now fall within the original and exclusive
 jurisdiction of Labor Arbiters are those money claims which have some reasonable causal
connection with the employer-employee relationship.”
We thereafter ruled that the "reasonable causal connection with the employer-employee
relationship" is a requirement not only in employees’ money claims against the employer but is,
likewise, a condition when the claimant is the employer.
In Dai-Chi Electronics Manufacturing Corporation v. Villarama, Jr.,which reiterated the San Miguel
ruling and allied jurisprudence, we pronounced that a non-compete clause, as in the "Goodwill
Clause" referred to in the present case, with a stipulation that a violation thereof makes the employee
liable to his former employer for liquidated damages, refers to postemployment relations of the
parties. We iterated that Article 217, paragraph 4 does not automatically cover all disputes between
an employer and its employee(s). We noted that the cause of action was within the realm of Civil Law,
thus, jurisdiction over the controversy belongs to the regular courts. At bottom, we considered that
the stipulation referred to postemployment relations of the parties.
That the "Goodwill Clause" in this case is likewise a postemployment issue should brook no
argument. There is no dispute as to the cessation of Portillo’s employment with Lietz Inc.23 She
simply claims her unpaid salaries and commissions, which Lietz Inc. does not contest. At that
juncture, Portillo was no longer an employee of Lietz Inc. The "Goodwill Clause" or the "Non-Compete
Clause" is a contractual undertaking effective after the cessation of the employment relationship
between the parties. In accordance with jurisprudence, breach of the undertaking is a civil law
dispute, not a labor law case.
It is clear, therefore, that while Portillo’s claim for unpaid salaries is a money claim that arises out of
or in connection with an employer-employee relationship, Lietz Inc.’s claim against Portillo for
violation of the goodwill clause is a money claim based on an act done after the cessation of the
employment relationship. And, while the jurisdiction over Portillo’s claim is vested in the labor
arbiter, the jurisdiction over Lietz Inc.’s claim rests on the regular courts.
In the case at bar, the difference in the nature of the credits that one has against the other, conversely,
the nature of the debt one owes another, which difference in turn results in the difference of the
forum where the different credits can be enforced, prevents the application of compensation. Simply,
the labor tribunal in an employee’s claim for unpaid wages is without authority to allow the
compensation of such claims against the post employment claim of the former employer for breach
of a post employment condition. The labor tribunal does not have jurisdiction over the civil case of
breach of contract. Indeed, the application of compensation in this case is effectively barred by Article
113 of the Labor Code which prohibits wage deductions except in three circumstances:
ART. 113. Wage Deduction. – No employer, in his own behalf or in behalf of any person, shall make
any deduction from wages of his employees, except:
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off has been
recognized by the employer or authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor.
CENTURY PROPERTIES v. EDWIN J. BABIANO

Facts:
On October 2, 2002, Babiano was hired by CPI as Director of Sales, and was eventually appointed as
Vice President for Sales effective September 1, 2007. As CPFs Vice President for Sales, Babiano was
remunerated with, inter alia, the following benefits: (a) monthly salary of P70,000.00; (b) allowance
of P50,000.00; and (c) 0.5% override commission for completed sales. His employment contract also
contained a "Confidentiality of Documents and Non-Compete Clause which, among others, barred
him from disclosing confidential information, and from working in any business enterprise that is in
direct competition with CPI "while he is employed and for a period of one year from date of
resignation or termination from CPI." Should Babiano breach any of the terms thereof, his "forms of
compensation, including commissions and incentives will be forfeited."
During the same period, Concepcion was initially hired as Sales Agent by CPI and was eventually
promoted as Project Director on September 1, 2007. As such, she signed an employment agreement,
denominated as "Contract of Agency for Project Director" which provided, among others, that she
would directly report to Babiano, and receive, a monthly subsidy of P60,000.00, 0.5% commission,
and cash incentives. On March 31, 2008, Concepcion executed a similar contract anew with CPI in
which she would receive a monthly subsidy of P50,000.00, 0.5% commission, and cash incentives as
per company policy. Notably, it was stipulated in both contracts that no employer-employee
relationship exists between Concepcion and CPI.
After receiving reports that Babiano provided a competitor with information regarding CPFs
marketing strategies, spread false information regarding CPI and its projects, recruited CPI's
personnel to join the competitor, and for being absent without official leave AWOL for 5 days, CPI,
through its Executive Vice President for Marketing and Development, Jose Marco R. Antonio, sent
Babiano a Notice to Explain as to why he should not be charged with disloyalty, conflict of interest,
and breach of trust and confidence for his actuations.
On February 25, 2009, Babiano tendered his resignation and revealed that he had been accepted as
Vice President of First Global BYO Development Corporation (First Global), a competitor of CPI.[19]
On March 3, 2009, Babiano was served a Notice of Termination for: (a) incurring AWOL; (b) violating
the "Confidentiality of Documents and Non-Compete Clause" when he joined a competitor enterprise
while still working for CPI and provided such competitor enterprise information regarding CPFs
marketing strategies; and (c) recruiting CPI personnel to join a competitor.
On the other hand, Concepcion resigned as CPFs Project Director through a letter, effective
immediately.
Respondents filed thereafter a complaint for non-payment of commissions and damages against CPI
and Antonio before the NLRC, docketed as NLRC Case No. NCR-08-12029-11, claiming that their
repeated demands for the payment and release of their commissions remained unheeded.
For its part, CPI maintained that Babiano is merely its agent tasked with selling its projects.
Nonetheless, he was afforded due process in the termination of his employment which was based on
just causes. It also claimed to have validly withheld Babiano's commissions, considering that they
were deemed forfeited for violating the "Confidentialty of Documents and Non-Compete Clause." On
Concepcion's money claims, CPI asserted that the NLRC had no jurisdiction to hear the same because
there was no employer-employee relations between them, and thus, she should have litigated the
same in an ordinary civil action.

Issue:
Whether or not there was an existence of employer-employee relationship between Babiano and
Century Properties, and Concepcion and Century Properties.

Held:
Anent the nature of Concepcion's engagement, based on case law, the presence of the following
elements evince the existence of an employer-employee relationship: (a) the power to hire, i.e., the
selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and
(d) the employer's power to control the employee's conduct, or the so called "control test." The
control test is commonly regarded as the most important indicator of the presence or absence of an
employer-employee relationship. Under this test, an employer-employee relationship exists where
the person for whom the services are performed reserves the right to control not only the end
achieved, but also the manner and means to be used in reaching that end.
Guided by these parameters, the Court finds that Concepcion was an employee of CPI considering
that: (a) CPI continuously hired and promoted Concepcion from October 2002 until her resignation
on February 23, 2009,thus, showing that CPI exercised the power of selection and engagement over
her person and that she performed functions that were necessary and desirable to the business of
CPI; (b) the monthly "subsidy" and cash incentives that Concepcion was receiving from CPI are
actually remuneration in the concept of wages as it was regularly given to her on a monthly basis
without any qualification, save for the "complete submission of documents on what is a sale
policy";(c) CPI had the power to discipline or even dismiss Concepcion as her engagement contract
with CPI expressly conferred upon the latter "the right to discontinue [her] service anytime during
the period of engagement should [she] fail to meet the performance standards,” among others, and
that CPI actually exercised such power to dismiss when it accepted and approved Concepcion's
resignation letter; and most importantly, (d) as aptly pointed out by the CA, CPI possessed the power
of control over Concepcion because in the performance of her duties as Project Director - particularly
in the conduct of recruitment activities, training sessions, and skills development of Sales Directors -
she did not exercise independent discretion thereon, but was still subject to the direct supervision of
CPI, acting through Babiano.
In the case of Insular Life Assurance Co., Ltd. v. NLRC, it was ruled that one's employment status is
defined and prescribed by law, and not by what the parties say it should be, viz.:
It is axiomatic that the existence of an employer-employee relationship cannot be negated by
expressly repudiating it in the management contract and providing therein that the "employee" is an
independent contractor when the terms of the agreement clearly show otherwise. For, the
employment status of a person is defined and prescribed by law and not by what the parties say it
should be. In determining the status of the management contract, the "four-fold test" on employment
earlier mentioned has to be applied.
 Paul Santiago v. Cf Sharp
FACTS:
Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about 5
yrs. In February 3, 1998, petitioner signed a new contract of employment with respondent, with the
duration of 9 months. The contract was approved by POEA. Petitioner was to be deployed on board
the “MSV Seaspread” which was scheduled to leave the port of Manila for Canada on 13 February
1998.
A week before the date of departure, Capt. Pacifico Fernandez, respondent’s Vice President, sent a
facsimile message to the captain of “MSV Seaspread,”, saying that it received a phone call from
Santiago’s wife and some other callers who did not reveal their identity and gave him some feedbacks
that Paul Santiago this time, if allowed to depart, will jump ship in Canada like his brother Christopher
Santiago. The captain of “MSV Seaspread replied that it cancel plans for Santiago to return to
Seaspread.
Petitioner thus told that he would not be leaving for Canada anymore. Petitioner filed a complaint for
illegal dismissal, damages, and attorney’s fees against respondent and its foreign principal, Cable and
Wireless (Marine) Ltd. The Labor Arbiter (LA) favored petitioner and ruled that the employment
contract remained valid but had not commenced since petitioner was not deployed and that
respondent violated the rules and regulations governing overseas employment when it did not
deploy petitioner, causing petitioner to suffer actual damages. On appeal by respondent, NLRC ruled
that there is no employer-employee relationship between petitioner and respondent because the
employment contract shall commence upon actual departure of the seafarer from the airport or
seaport at the point of hire and with a POEA-approved contract. In the absence of an employer-
employee relationship between the parties, the claims for illegal dismissal, actual damages, and
attorney’s fees should be dismissed. But the NLRC found respondent’s decision not to deploy
petitioner to be a valid exercise of its management prerogative. Petitioner filed MR but it was denied.
He went to CA. CA affirmed the decision of NLRC. Petitioner’s MR was denied. Hence this case.

ISSUE:
When does an employer- employee relationship begin in the case at bar.

RULING:
There is some merit in the petition. The parties entered into an employment contract whereby
petitioner was contracted by respondent to render services on board “MSV Seaspread” for the
consideration of US$515.00 per month for 9 months, plus overtime pay. However, respondent failed
to deploy petitioner from the port of Manila to Canada. Considering that petitioner was not able to
depart from the airport or seaport in the point of hire, the employment contract did not commence,
and no employer-employee relationship was created between the parties. However, a 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 would have taken place had petitioner been actually deployed from the point
of hire. Thus, even before 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.
Neither the manning agent nor the employer can simply prevent a seafarer from being deployed
without a valid reason. Respondent’s act of preventing petitioner from departing the port of Manila
and boarding “MSV Seaspread” constitutes a breach of contract, giving rise to petitioner’s cause of
action. Respondent unilaterally and unreasonably reneged on its obligation to deploy petitioner and
must therefore answer for the actual damages he suffered.
Despite the absence of an employer-employee relationship between petitioner and respondent, the
Court rules that the NLRC has jurisdiction over petitioner’s 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 NLR) shall have the original and exclusive jurisdiction to hear and decide, within 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.”
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.
Respondent is liable to pay petitioner only the actual damages in the form of the loss of nine (9)
months’ worth of salary as provided in the contract. He is not, however, entitled to overtime pay.
While the contract indicated a fixed overtime pay, it is not a guarantee that he would receive said
amount regardless of whether or not he rendered overtime work. Even though petitioner was
prevented without valid reason from rendering regular much less overtime service, the fact remains
that there is no certainty that petitioner will perform overtime work had he been allowed to board
the vessel. The amount stipulated in the contract will be paid only if and when the employee rendered
overtime work. Realistically speaking, a seaman, by the very nature of his job, stays on board a ship
or vessel beyond the regular eight-hour work schedule. For the employer to give him overtime pay
for the extra hours when he might be sleeping or attending to his personal chores or even just lulling
away his time would be extremely unfair and unreasonable.
This Court has upheld management prerogatives so long as they are exercised in good faith for the
advancement of the employer’s interest and not for the purpose of defeating or circumventing the
rights of the employees under special laws or under valid agreements. Respondent’s failure to deploy
petitioner is unfounded and unreasonable However, moral damages cannot be awarded in this case.
because respondent’s action was not tainted with bad faith, or done deliberately to defeat petitioner’s
rights, as to justify the award of moral damages. Seafarers are considered contractual employees and
cannot be considered as regular employees under the Labor Code. Their employment is governed by
the contracts they sign every time they are rehired and their employment is terminated when the
contract expires. The exigencies of their work necessitates that they be employed on a contractual
basis.
 Intel Technology Philippines v. NLRC & Cabiles
FACTS:
Cabiles was initially hired by Intel Phil. on April 16, 1997 as an Inventory Analyst. He was
subsequently promoted several times over the years and was also assigned at Intel Arizona and Intel
Chengdu. He later applied for a position at Intel Semiconductor Limited Hong Kong (Intel HK). He
received a letter offering the position of Finance Manager by Intel HK. Before accepting the offer, he
inquired from Intel Phil., through an email the consequences of accepting the newly presented
opportunity in Hong Kong. He asked the process he need to go through regarding the benefits and
clearances in Intel Phils and would an email notification be enough. He also clarified whether he will
receive retirement benefits considering he will be in the service for 10 years on April 16, 2007 with
Intel and should he accept the offer of Intel HK, will the 9.5 years in the service be rounded of to 10
years.
Intel Phil., through Penny Gabronino (Gabronino), replied that he will not be eligible to receive his
retirement benefit not having reached 10 years of service at the time he moved to Hong Kong.
Further, Intel do not round up the years of service.
In case he move back to the Philippines his total tenure of service will be computed less on the period
that you are out of Intel Philippines.
On January 31, 2007, Cabiles signed the job offer.
On March 8, 2007, Intel Phil. issued Cabiles his "Intel Final Pay Separation Voucher" indicating a net
payout ofP165,857.62. On March 26, 2007, Cabiles executed a Release, Waiver and Quitclaim in favor
of Intel Phil. acknowledging receipt of P165,857.62 as full and complete settlement of all benefits due
him by reason of his separation from Intel Phil.
On September 8, 2007, after seven (7) months of employment, Cabiles resigned from Intel HK.
About two years thereafter, Cabiles filed a complaint for non-payment of retirement benefits and for
moral and exemplary damages with the NLRC. He insisted that he was employed by Intel for 10 years
and 5 months from April 1997 to September 2007 a period which included his seven (7) month stint
with Intel HK. Thus, he believed he was qualified to avail of the benefits under the company's
retirement policy allowing an employee who served for 10 years or more to receive retirement
benefits.
The LA held that Cabiles did not sever his employment with Intel Phil. when he moved to Intel HK,
similar to the instances when he was assigned at Intel Arizona and Intel Chengdu.
On appeal, the NLRC affirmed the LA decision. It determined that his decision to move to Intel HK
was not definitive proof of permanent severance of his ties with Intel Phil. It treated his transfer to
Hong Kong as akin to his overseas assignments in Arizona and Chengdu. As to the email exchange
between Cabiles and Intel Phil., the NLRC considered the same as insufficient to diminish his right
over retirement benefits under the law. Meanwhile, the NLRC disregarded the Waiver because at the
time it was signed, the retirement pay due him had not yet accrued.
Aggrieved, Intel Phil. elevated the case to the CA via a petition for certiorari with application for a
Temporary Restraining Order (TRO). The application for TRO was denied. A motion for
reconsideration, was filed, but it was also denied in a Resolution, which also dismissed the petition
for certiorari.
Intel Phil. filed a motion for reconsideration.
The NLRC issued a writ of execution against Intel Phil. to pay P3,201,398.60 and P31,510.00
representing the execution fees.
Intel Phil. satisfied the judgment on by paying the amount of P3,201,398.60 which included the
applicable withholding taxes due and paid to the BIR. Cabiles received a net amount ofP2,485,337.35,
covered by a BPI Managers check.
Intel Phil. filed restitution of all the amounts paid by them pursuant to the NLRC's writ of execution
and the NLRC order.
Intel filed a petition for review, however, the CA dismissed the same, affirming the NLRC decision.
ISSUE:
Whether the CA erred in ruling that private respondent was entitled to retire under Intel Philippines
retirement plan.
HELD:
The Court of Appeals decision is reversed.
Resignation
Resignation is the formal relinquishment of an office,the overt act of which is coupled with an intent
to renounce. This intent could be inferred from the acts of the employee before and after the alleged
resignation.
In contemplating whether to accept the offer from Intel HK, Cabiles wrote Intel Phil. through
Gabronino. This communication manifested two of his main concerns: a) clearance procedures; and
b) the probability of getting his retirement pay despite the non-completion of the required 10 years
of employment service. Beyond these concerns, however, was his acceptance of the fact that he would
be ending his relationship with Intel Phil. as his employer. The words he used - local hire, close,
clearance denote nothing but his firm resolve to voluntarily disassociate himself from Intel Phil. and
take on new responsibilities with Intel HK.
His acceptance of the offer meant letting go of the retirement benefits he now claims as he was
informed through email correspondence that his 9.5 years of service with Intel Phil. would not be
rounded off in his favor. He, thus, placed himself in this position, as he chose to be employed in a
company that would pay him more than what he could earn in Chengdu or in the Philippines.

Theory of Secondment
Cabiles views his employment in Hong Kong as an assignment or an extension of his employment
with Intel Phil. The continuity, existence or termination of an employer-employee relationship in a
typical secondment contract or any employment contract for that matter is measured by the
following yardsticks: 1. the selection and engagement of the employee; 2. the payment of wages; 3.
the power of dismissal; and 4. the employers power to control the employees conduct. Victorio
Meteor v. Creative Creatures Inc, G.R. No. 171275, July 13, 2009. As applied, all of the above
benchmarks ceased upon Cabiles assumption of duties with Intel HK on February 1, 2007. Intel HK
became the new employer.
Undoubtedly, Cabiles decision to move to Hong Kong required the abandonment of his permanent
position with Intel Phil. in order for him to assume a position in an entirely different company.
Clearly, the "transfer" was more than just an assignment. It constituted a severance of Cabiles
relationship with Intel Phil., for the assumption of a position with a different employer, rank,
compensation and benefits.
Hence, Cabiles theory of secondment must fail.
What distinguishes Intel Chengdu and Intel Arizona from Intel HK is the lack of intervention of Intel
Phil. on the matter. In the two previous transfers, Intel Phil. remained as the principal employer while
Cabiles was on a temporary assignment.

Release, Waiver and Quitclaim

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily
entered into and represents a reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. It is only where there is clear proof that the waiver
was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable
on its face, that the law will step in to annul the questionable transaction. But where it is shown that
the person making the waiver did so voluntarily, with full understanding of what he was doing, and
the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as
a valid and binding undertaking. Goodrich Manufacturing Corporation, v. Ativo, G.R. No. 188002,
February 1, 2010
Suffice it to state that nothing is clearer than the words used in the Waiver duly signed by Cabiles -
that all claims, in the present and in the future, were waived in consideration of his receipt of the
amount of P165,857.62. Because the waiver included all present and future claims, the non-accrual
of benefits cannot be used as a basis in awarding retirement benefits to him.
Retirement benefits
Cabiles is not entitled to the Retirement Benefits
Having effectively resigned before completing his 10th year anniversary with Intel Phil. and after
having validly waived all the benefits due him, if any, Cabiles is hereby declared ineligible to receive
the retirement pay pursuant to the retirement policy of Intel Phil.
For that reason, Cabiles must return all the amounts he received from Intel Phil. pursuant to the Writ
of Execution issued by the NLRC.
 TOLOSA vs NLRC

FACTS:
Evelyn Tolosa, was the widow of Captain Virgilio Tolosa who was hired by Qwana-Kaiun, through its
manning agent, Asia Bulk, to be the master of the Vessel named M/V Lady Dona. CAPT. TOLOSA had
a monthly compensation of US$1700, plus US$400.00 monthly overtime allowance. His contract
officially began on November 1, 1992, as supported by his contract of employment when he assumed
command of the vessel in Yokohama, Japan. The vessel departed for Long Beach California, passing
by Hawaii in the middle of the voyage. At the time of embarkation, CAPT. TOLOSA was allegedly
shown to be in good health.
“During ‘channeling activities’ upon the vessel’s departure from Yokohama sometime on November
6, 1992, CAPT. TOLOSA was drenched with rainwater. The following day, November 7, 1992, he had
a slight fever and in the succeeding twelve (12) days, his health rapidly deteriorated resulting in his
death on November 18, 1992. It was alleged that the request for emergency evacuation of Capt Tolosa
was too late.
Because of the death of CAPT. TOLOSA, his wife, EVELYN, as petitioner, filed a Complaint/Position
Paper before the POEA against Qwana-Kaiun, thru its resident-agent, Mr. Fumio Nakagawa, ASIA
BULK, Pedro Garate and Mario Asis, as respondents. The case was however transferred to the NLRC,
when the amendatory legislation expanding its jurisdiction, and removing overseas employment
related claims from the ambit of POEA jurisdiction.
Petitioner argues that her cause of action is not predicated on a quasi delict or tort, but on the failure
of private respondents -- as employers of her husband (Captain Tolosa) -- to provide him with timely,
adequate and competent medical services under Article 161 of the Labor Code.
Respondents aver that the Labor Arbiter has no jurisdiction over the subject matter, since her cause
did not arise from an employer-employee relation, but from a quasi delict or tort. Further, there is
no reasonable causal connection between her suit for damages and her claim under Article 217 (a)(4)
of the Labor Code, which allows an award of damages incident to an employer-employee relation.

ISSUE:
Whether or not the Labor Arbiter has jurisdiction over the subject matter.

HELD:
The SC held that the NLRC and the labor arbiter had no jurisdiction over petitioner’s claim for
damages, because that ruling was based on a quasi delict or tort per Article 2176 of the Civil Code.
After carefully examining the complaint/position paper of petitioner, we are convinced that the
allegations therein are in the nature of an action based on a quasidelict or tort. It is evident that she
sued Pedro Garate and Mario Asis for gross negligence. Petitioner’s complaint/position paper refers
to and extensively discusses the negligent acts of shipmates Garate and Asis, who had no employer-
employee relation with Captain Tolosa. The SC stressed that the case does not involve the
adjudication of a labor dispute, but the recovery of damages based on a quasi delict. The jurisdiction
of labor tribunals is limited to disputes arising from employer-employee relations.
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.”
While it is true that labor arbiters and the NLRC have jurisdiction to award not only reliefs provided
by labor laws, but also damages governed by the Civil Code, these reliefs must still be based on an
action that has a reasonable causal connection with the Labor Code, other labor statutes, or collective
bargaining agreements. The central issue is determined essentially from the relief sought in the
complaint.
“Claims for damages under paragraph 4 of Article 217 must have a reasonable causal connection with
any of the claims provided for in the article in order to be cognizable by the labor arbiter. Only if
there is such a connection with the other claims can the claim for damages be considered as arising
from employer-employee relations.” In the present case, petitioner’s claim for damages is not related
to any other claim under Article 217, other labor statutes, or collective bargaining agreements.
Petitioner cannot anchor her claim for damages to Article 161 of the Labor Code, which does not
grant or specify a claim or relief. This provision is only a safety and health standard under Book IV
of the same Code. The enforcement of this labor standard rests with the labor secretary. Thus, claims
for an employer’s violation thereof are beyond the jurisdiction of the labor arbiter. In other words,
petitioner cannot enforce the labor standard provided for in Article 161 by suing for damages before
the labor arbiter.
It is not the NLRC but the regular courts that have jurisdiction over actions for damages, in which the
employer-employee relation is merely incidental, and in which the cause of action proceeds from a
different source of obligation such as a tort. Since petitioner’s claim for damages is predicated on a
quasi delict or tort that has no reasonable causal connection with any of the claims provided for in
Article 217, other labor statutes, or collective bargaining agreements, jurisdiction over the action lies
with the regular courts -- not with the NLRC or the labor arbiters.
Petition is denied.