SMC vs Etcuban Dec 3, 1999

Facts:
 In 1981, San Miguel Corporation (SMC) informed its Mandaue
City Brewery employees that it was suffering from heavy losses and
financial distress which could eventually lead to its total closure caused
by its poor sales performance.
 SMC offered its Retrenchment to Prevent Loss Program to its
employees
 SMC admonished its employees that their failure to avail of the
retrenchment program might lead to difficulty in following-up and
obtaining their separation pay from SMCs main office in Manila.
 Convinced by SMC, respondents, who had been employees of
SMC since the 1960s, availed of the retrenchment program
 Respondents were given their termination letters and separation
pay. In return, respondents executed receipt and release documents in
favor of SMC.
 Sometime in May of 1986, respondents discovered that SMC
was never in financial distress during the time when they were being
retrenched but was, in fact, enjoying a growth in sales.
 Respondents also learned that, during their retrenchment, SMC
was engaged in hiring new employees.
 Respondents concluded that SMCs financial distress story and
retrenchment program were merely schemes to rid itself of regular
employees and, thus, avoid the payment of their actual benefits.
 On 17 October 1988, respondents filed a complaint before the
Regional Arbitration Branch Nr VII of the NLRC for the declaration of
nullity of the retrenchment program due to reason that they were
deceived into severing their employment due to SMCs fictional financial
distress story and fraudulent retrenchment program.
 Respondents prayed for reinstatement, backwages and
damages.
 LA- dismissed the complaint, termination not pursuant to
Retrenchment Program but rather for illegal dismissal (Art 291 New LC)
 ART. 291. Money claims. All money claims arising from
employer-employee relations accruing during the effectivity of this Code,
shall be filed within three (3) years from the time the cause of action
accrued; otherwise they shall be forever barred
 Complainant’s causes of action have already prescribed.
 On 14 December 1993, respondents, who were thirty-one (31) in
number, again filed a complaint against SMC, but this time before the
RTC of Cebu City, Branch 19.
 Respondents asserted that since the cause of their contract of
termination was non-existent, i.e., the claim of SMC that it was under
financial distress, the said contract is null and void.
 Instead of filing an answer, SMC filed a motion to dismiss on the
bases of lack of jurisdiction, res judicata, payment, prescription and
failure to state a cause of action.
 RTC granted the SMC’s motion to dismiss on the grounds of lack
of jurisdiction and prescription.
 Respondent does state that the alleged acts leading to their
signing of the contract of termination are acts constitute labor disputes.
 The contract of termination which plaintiffs were allegedly
induced to sign is not void from the beginning. At most, such contract is
voidable, plaintiff’s consent thereto being allegedly vitiated by fraud and
deceit.
 The action to annul the same should be filed within four (4) years
from discovery of the fraud or deceit.
 From May 1986 to January 14, 1993, more than six (6) years
have already elapsed.
 Clearly, the action, has already prescribed.
 The case is dismissed.
 CA reversed and set aside the lower courts order of dismissal
and remanded the case to the RTC for further proceedings.

Issue: WON the RTC Cebu, Br 19, has jurisdiction over the instant case
and the cause of action of the respondents

Ruling:
 No. claims for damages under paragraph 4 of Article 217, to be
cognizable by the Labor Arbiter, must have a reasonable causal
connection with any of the claims provided for in that article. Only if there
is such a connection with the other claims can the claim for the damages
be considered as arising from employer-employee relations.
 In the present case, while respondents insist that their action is
for the declaration of nullity of their contract of termination, what is
inescapable is the fact that it is, in reality, an action for damages
emanating from employer-employee relations.
 The Court is aware that the Civil Code provisions on contracts
and damages may be used as bases for addressing the claim of
respondents.
 However, the fact remains that the present action primarily
involves an employer-employee relationship.
 The damages incurred by respondents as a result of the alleged
fraudulent retrenchment program and the allegedly defective contract of
termination are merely the civil aspect of the injury brought about by their
illegal dismissal.
 The civil ramifications of their actual claim cannot alter the reality
that it is primordially a labor matter and, as such, is cognizable by labor
courts.
 When fraud is employed to obtain the consent of the other party
to enter into a contract, the resulting contract is merely a voidable
contract, that is, a valid and subsisting contract until annulled or set aside
by a competent court.
 An action to annul a voidable contract based on fraud should be
brought within four (4) years from the discovery of the same. In the
present case, respondents discovered SMCs fraud in May
1986. However, the action to question the validity of the contract was
only brought on 14 December 1993, or more than seven (7) years after
the discovery of the fraud. Clearly, respondent’s action has already
prescribed.

Santiago vs CF Sharp July 10, 2007

Facts:
 Paul Santiago had been working as a seafarer for Smith Bell
Management, Inc. (respondent) for about five (5) years.
 On 3 February 1998, petitioner signed a new contract of
employment with respondent, with the duration of nine (9) months.
 The following day 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.
 Capt. Pacifico Fernandez, respondent’s Vice President, sent a
facsimile message to the captain of "MSV Seaspread,” stated that he
might do what his brother did that after depart he will jump ship in
Canada.
 "MSV Seaspread" cancel plans for him
 Petitioner was thus told that he would not be leaving for Canada
anymore, but he was reassured that he might be considered for
deployment at some future date.
 Petitioner filed a complaint for illegal dismissal
 The case was raffled to Labor Arbiter Teresita Castillon-Lora,
who ruled that the employment contract remained valid but had not
commenced since petitioner was not deployed.
 The labor arbiter held respondent liable.
 On appeal by respondent, the (NLRC) ruled that there is no
employer-employee relationship because under POEA Standard
Contract, 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
 Petitioner moved for the reconsideration but denied
 Elevated the case to the Court of Appeals through a petition for
certiorari
 The Court of Appeals noted that there is an ambiguity in the
NLRC’s Decision when it affirmed with modification the labor arbiter’s
Decision, because by the very modification introduced by the
Commission (vacating the award of actual damages and attorney’s fees),
there is nothing more left in the labor arbiter’s Decision to affirm.
 CA- petitioner is not entitled to actual damages because
damages are not recoverable by a worker who was not deployed by his
agency within the period prescribed in the POEA Rules.
 Petitioner’s subsequent MR – denied

Issue: WON there is an employer-employee relationship that makes the

claims or disputes of the Overseas Filipino Worker by virtue of a contract
fall within the jurisdiction of the Labor Arbiter of the NLRC.

Ruling:
 Yes. There is no question that the parties entered into an
employment contract, 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.
 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, as earlier discussed, 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.
 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.
 The POEA Rules only provide sanctions which the POEA can
impose on erring agencies. It does not provide for damages and money
claims recoverable by aggrieved employees because it is not the POEA,
but the NLRC, which has jurisdiction over such matters.
 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 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.

Montoya vs Escayo March 21, 1989

Facts:
 Private Respondents (Teresita Escayo, Joy Escayo, Aida
Ganancial, Mary Ann Cape, Cecilia Correjado, Erlinda Paypon and
Rosalie Verde) were all formerly employed as salesgirls in the petitioner's
store, the "Terry's Dry Goods Store," in Bacolod City
 They separately filed complaints for the collection of sums of
money against the petitioner for alleged unpaid overtime pay, holiday
pay, 13th month pay, ECOLA, and service leave pay: for violation of the
minimum wage law, illegal dismissal, and attorney's fees.
 On August 1, 1984, the petitioner-employer moved for the
dismissal of the complaints, that the private respondents failed to refer
the dispute to the Lupong 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.
 These actions were allegedly violative of the provisions of P.D.
No. 1508, which apply to the parties who are all residents of Bacolod
City.
 LA – ordered the dismissal
 NLRC- reversed and remanded the case to the Labor Arbiter
 A motion for reconsideration was filed by the petitioner but this
was denied
 The petitioner insists that the failure of the private respondents to
first submit their complaints for possible conciliation and amicable
settlement in the proper barangay court in Bacolod City and to secure a
certification from the Lupon Chairman prior to their filing with the Labor
Arbiter, divests the Labor Arbiter, as well as the respondent Commission
itself, of jurisdiction over these labor controversies and renders their
judgments thereon null and void.
 the Solicitor General, as counsel for the public respondent
NLRC, in his comment, strongly argues and convincingly against the
applicability of P.D. No. 1508 to labor cases.
 Dismiss the petition: the provisions of P.D. No. 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.

Issue: WON P.D. 1508 (Katarungang Pambarangay Law) is applicable to

labor disputes?

Ruling:
No. The provisions of P.D. No. 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 tol abor cases.
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 settle mentor 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. Finally, it is already well-settled that the
ordinary rules on procedure are merely suppletory in character vis-a-vis
labor disputes which are primarily governed by labor laws.
San Jose vs NLRC August 16, 1998
Facts:
 Vicente San Jose, complainant, in his position paper states that
he was hired sometime in July 1980 as a stevedore continuously until he
was advised in April 1991 to retire from service considering that he
already reached 65 years old; that accordingly, he did apply for
retirement and was paid P3,156.39 for retirement pay
 It alleged that complainant’s latest basic salary was P120.34 per
day; that he only worked on rotation basis and not seven days a week
due to numerous stevedores who cannot all be given assignments at the
same time
 Contentions of Ocean Terminal Services: that all stevedores only
for paid every time they were assigned or actually performed stevedoring
 that the computation used was the same computation applied to
the other stevedores
 that the use of divisor 303 is not applicable because complainant
performed stevedoring job only on call, so while he was connected with
the company for the past 11 years, he did not actually render 11 years of
service
 that the burden of proving that complainants latest salary
was P200.00 rests upon him
 that he already voluntarily signed a waiver of quitclaim
 that if indeed respondent took advantage of his illiteracy into
signing his quitclaim, he would have immediately filed this complaint but
nay, for it took him two (2) years to do so
 the court find the petitioner entitled to differential
 Labor Arbiter - His claim for separation pay differential is based
on the Collective Bargaining Agreement (CBA) between his union and
the respondent company
 Since the instant case arises from interpretation or
implementation of a collective bargaining agreement, the Labor Arbiter
should have dismissed it for lack of jurisdiction in accordance with Article
217 (c) of the Labor Code
 NLRC reversed on jurisdictional ground
Issue: Whether the Labor Arbiter or Voluntary Arbitrator has the
jurisdiction over the dispute.

Ruling:
 The National Labor Relations Commission correctly ruled that
the Labor Arbiter had no jurisdiction over the case, because the case
involved an issue arising from the interpretation or implementation of a
Collective Bargaining Agreement in which the Voluntary Arbitrator has the
exclusive jurisdiction over the dispute.
 The Voluntary Arbitrator or panel of Voluntary Arbitrators shall
have original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the
Collective Bargaining Agreement and those arising from 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
Voluntary Arbitration provided in the Collective Bargaining Agreement.

Ace Navigation vs Fernandez October 10, 2012

Facts:
 On October 9, 2008, Seaman Teodorico Fernandez assisted by
his wife, Glenita Fernandez, filed with the NLRC a complaint for disability
benefits, with prayer for moral and exemplary damages, plus attorney’s
fees, against Ace Navigation Co., Inc., Vela International Marine Ltd.,
and/or Rodolfo Pamintuan
 The petitioners moved to dismiss the complaint, contending that
the labor arbiter had no jurisdiction over the dispute.
 They argued that exclusive original jurisdiction is with the
voluntary arbitrator or panel of voluntary arbitrators, pursuant to Section
29 of the POEA Standard Employment Contract, since the parties are
covered by a CBA.
 Under Section 14 of the CBA, a dispute between a seafarer and
the company shall be settled through the grievance machinery and
mandatory voluntary arbitration.
 Fernandez argued that inasmuch as his complaint involves a
money claim, original and exclusive jurisdiction over the case is vested
with the labor arbiter.
 LA – denied the motion to dismiss; the labor arbiter has original
and exclusive jurisdiction over money claims arising out of an employer-
employee relationship or by virtue of any law or contract, notwithstanding
any provision of law to the contrary
 Appealed to the NLRC, but the labor agency denied the appeal
 CA denied the petition on procedural and substantive grounds
 Procedurally, it found the petitioners to have availed of the wrong
remedy when they challenged the labor arbiter’s denial of their motion to
dismiss by way of an appeal to the NLRC; it rejected the petitioners’
submission that the grievance and voluntary arbitration procedure of the
parties

Issue: Who has the original and exclusive jurisdiction over

Fernandez’s disability claim

Ruling:
 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 voluntary arbitrators.
 There is no dispute that the claim arose out of Fernandez’s
employment with the petitioners and that their relationship is covered by
a CBA — the AMOSUP/TCC or the AMOSUP-VELA CBA.
 The CBA provides for a grievance procedure for the resolution of
grievances or disputes which occur during the employment relationship
and, like the grievance machinery created under Article 261 of the Labor
Code, it is a two-tiered mechanism, with voluntary arbitration as the last
step
 Any Dispute, grievance, or misunderstanding concerning any
ruling, practice, wages or working conditions in the COMPANY or any
breach of the Contract of Employment, or any dispute arising from the
meaning or application of the provisions of this Agreement or a claim of
violation thereof or any complaint or cause of action that any such
Seaman may have against the COMPANY, as well as complaints which
the COMPANY may have against such Seaman shall be brought to the
attention of the GRIEVANCE RESOLUTION COMMITTEE before either
party takes any action, legal or otherwise. Bringing such a dispute to the
Grievance Resolution Committee shall be unwaivable prerequisite or
condition precedent for bringing any action, legal or otherwise, in any
forum and the failure to so refer the dispute shall bar any and all legal or
other actions.

Austria vs NLRC August 16, 1999

Facts:
 Private Respondent Central Philippine Union Mission
Corporation of the Seventh-Day Adventists is a religious corporation duly
organized and existing under Philippine law.
 Petitioner, on the other hand, was a Pastor of the SDA until 31
October 1991, when his services were terminated.
 Pastor Dionisio V. Austria worked with the SDA for twenty eight
(28) years from 1963 to 1991
 Due to several promotions, he held the position of district pastor
until his services were terminated
 On various occasions from August up to October, 1991,
petitioner received several communications from Mr. Eufronio Ibesate,
the treasurer of the Negros Mission asking him to admit accountability
and responsibility for the church tithes and offerings collected by his wife,
Mrs. Thelma Austria, in his district which amounted to P15,078.10, and to
remit the same to the Negros Mission.
 The petitioner answered saying that he should not be made
accountable since it was Pastor Buhat and Ibesate who authorized his
wife to collect the tithes and offerings since he was very ill to be able to
do the collecting.
 Fact-finding committee was created to investigate. The petitioner
received a letter of dismissal citing:
1) Misappropriation of denominational funds;
2) Willful breach of trust;
3) Serious misconduct;
4) Gross and habitual neglect of duties; and
5) Commission of an offense against the person of employer's duly
authorized representative as grounds for the termination of his services.
 Petitioner filed a complaint with the Labor Arbiter for illegal
dismissal, and sued the SDA for reinstatement and backwages plus
damages. Decision was rendered in favor of petitioner.
 SDA appealed to the NLRC. Decision was rendered in favor of
respondent.
 Petitioner filed a motion for reconsideration, the LA decision’s
reinstated

Issue: WON the Labor Arbiter/NLRC has jurisdiction to try and decide
the complaint filed by petitioner against the SDA

Ruling:
 Yes. As pointed out by the OSG in its memorandum, the grounds
invoked for petitioners dismissal, namely: 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 his employers duly authorize representative, are all based on
Article 282 of the Labor Code which enumerates the just causes for
termination of employment. By this alone, it is palpable that the reason
for petitioner’s dismissal from the service is not religious in nature.
 Coupled with this is the act of the SDA in furnishing NLRC with a
copy of petitioner’s letter of termination.
 As aptly stated by the OSG, this again is an eloquent admission
by private respondents that NLRC has jurisdiction over the case.
 Aside from these, SDA admitted in a certification issued by its
officer, Mr. Ibesate, that petitioner has been its employee for twenty-eight
(28) years.
 SDA even registered petitioner with the Social Security System
(SSS) as its employee.
 As a matter of fact, the workers records of petitioner have been
submitted by private respondents as part of their exhibits.
 From all of these it is clear that when the SDA terminated the
services of petitioner, it was merely exercising its management
prerogative to fire an employee which it believes to be unfit for the job.
 As such, the State, through the Labor Arbiter and the NLRC, has
the right to take cognizance of the case and to determine whether the
SDA, as employer, rightfully exercised its management prerogative to
dismiss an employee. This is in consonance with the mandate of the
Constitution to afford full protection to labor.
 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.

Bañez vs Valdevilla May 9, 2000

Facts:
 Bebiano M. Baez was the sales operations manager of Oro
Marketing, Inc in its branch in Iligan City.
 In 1993, private respondent "indefinitely suspended" petitioner
and the latter filed a complaint for illegal dismissal with NLRC.
 LA - found petitioner to have been illegally dismissed and
ordered the payment of separation pay, backwages and attorney's fees.
 Appealed to the NLRC - dismissed the same for having been
filed out of time.
 CA - case was dismissed on technical grounds, however, the
Court also pointed out that even if all the procedural requirements for the
filing of the petition were met, it would still be dismissed for failure to
show grave abuse of discretion on the part of the NLRC.
 Private Respondent filed a complaint for damages before the
Regional Trial Court of Misamis Oriental
 Petitioner filed a motion to dismiss the above complaint;
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, and is barred by reason of the
final judgment in the labor case.
 He accused private respondent of splitting causes of action also
pointed out that the civil action of private respondent is an act of forum-
shopping and was merely resorted to after a failure to obtain a favorable
decision with the NLRC
 The respondent RTC Judge Valdevilla ruled that it had
jurisdiction over the subject matter, since the complaint did not ask for
any relief under the Labor Code, but rather to recover damages as
redress for Baez’s nefarious activities, causing damage and prejudice to
Oro Marketing. Since this there was a breach of contractual obligation,
which is within the realm of civil law, the jurisdiction belongs to the
regular courts.

Issue: WON RTC has jurisdiction over the claim for damages filed by
Oro Marketing against Baez.

Ruling:
 No. Presently, and as amended by R.A. 6715, the jurisdiction of
Labor Arbiters and the NLRC in Article 217 is comprehensive enough to
include claims for all forms of damages "arising from the employer-
employee relations"
 Whereas this Court in a number of occasions had applied the
jurisdictional provisions of Article 217 to claims for damages filed by
employees, we hold that by the designating clause "arising from the
employer-employee relations" 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.

Dai-Chi vs Villarama November 21, 1994

Facts:
 On July 29, 1993, petitioner filed a complaint for damages with
the Regional Trial Court, Branch 156, Pasig, Metro Manila, against
private respondent, a former employee.
 Petitioner alleged that private respondent violated paragraph five
of their Contract of Employment: That for a period of two (2) years after
termination of service from EMPLOYER, EMPLOYEE shall not in any
manner be connected, and/or employed, be a consultant and/or be an
informative body directly or indirectly, with any business firm, entity or
undertaking engaged in a business similar to or in competition with that
of the EMPLOYER
 Petitioner claimed that private respondent became an employee
of Angel Sound Philippines Corporation, a corporation engaged in the
same line of business as that of petitioner, within two years from January
30, 1992, the date of private respondent's resignation from petitioner's
employ. Petitioner further alleged that private respondent is holding the
position of Head of the Material Management Control Department, the
same position he held while in the employ of petitioner.
 Respondent court, in its Order dated September 20, 1993, ruled
that it had no jurisdiction over the subject matter of the controversy
because the complaint was for damages arising from employer-
employee relations.
 Petitioner asks for the reversal of respondent court's dismissal of
the civil case, it argues that the cause of action did not arise from
employer-employee relations, even though the claim is based on a
provision in the employment contract.

Issue: Is petitioner's claim for damages one arising from employer-

employee relations?

Ruling:
 No. Petitioner does not ask for any relief under the Labor Code
of the Philippines. It seeks to recover damages agreed upon in the
contract as redress for private respondent's breach of his contractual
obligation to its "damage and prejudice". Such cause of action is within
the realm of Civil Law, and jurisdiction over the controversy belongs to
the regular courts. More so when we consider that the stipulation refers
to the post-employment relations of the parties.
 On appeal to this court, we held that jurisdiction over the
controversy belongs to the civil courts. We stated that the action was for
breach of a contractual obligation, which is intrinsically a civil dispute. We
further stated that while seemingly the cause of action arose from
employer-employee relations, the employer's claim for damages is
grounded on "wanton failure and refusal" without just cause to report to
duty coupled with the averment that the employee "maliciously and with
bad faith" violated the terms and conditions of the contract to the damage
of the employer. Such averments removed the controversy from the
coverage of the Labor Code of the Philippines and brought it within the
purview of Civil Law.

SMC vs NLRC April 16, 2008

Facts:
 Ernesto M. Ibias (respondent) was employed by SMC on 24
December 1978 initially as a CRO operator in its Metal Closure and
Lithography Plant. Respondent continuously worked therein until he
advanced as Zamatic operator.
 He was also an active and militant member of a labor
organization called Ilaw Buklod Manggagawa (IBM)-SMC Chapter.
 According to SMCs Policy on Employee Conduct,[4] absences
without permission, which are absences not covered either by a
certification of the plant doctor that the employee was absent due to
sickness or by a duly approved application for leave of absence filed at
least six (6) days prior to the intended leave, are subject to disciplinary
action, also punishes falsification of company records or documents with
discharge or termination
 As per company records, respondents got 14 absences, he was
given a written warning, and that further absences would be subject to
disciplinary action.
 Respondent was alleged to have falsified his medical
consultation card by stating therein that he was granted sick leave by the
plant clinic on said dates when in truth he was not.
 Respondent was required to state in writing why he should not
be subject to disciplinary action for falsifying his medical consultation
card however, he did not comply
 He was again issued two Notices to Explain, but his explanation
did not earned any merit.
 After the completion of the investigation, SMC concluded that
respondent committed the offenses of excessive AWOPs and falsification
of company records or documents, and accordingly dismissed him.
 On 30 March 1998, respondent filed a complaint for illegal
dismissal against SMC. The labor arbiter believed that respondent had
committed the absences pointed out by SMC but found the imposition of
termination of employment based on his AWOPs to be disproportionate
since SMC failed to show by clear and convincing evidence that it had
strictly implemented its company policy on absences. It also noted that
termination based on the alleged falsification of company records was
unwarranted in view of SMC’s failure to establish respondent’s guilt.
 The appellate court also held that respondent’s AWOPs did not
warrant his dismissal in view of SMC’s inconsistent implementation of its
company policies.
 It could not understand why respondent was given a mere
warning for his absences on 28 and 29 April which constituted his 5th
and 6th AWOPs, respectively, when these should have merited
suspension under SMC’s policy.
 According to the appellate court, since respondent was merely
warned, logically said absences were deemed committed for the first
time; thus, it follows that the subject AWOPs did not justify his dismissal
because under SMC’s policy, the 4th to 9th AWOPs are meted the
corresponding penalty only when committed for the second time.

Issue: Whether the CA erred in sustaining the findings of the labor

arbiter and the NLRC and in dismissing SMCs claims that respondent
was terminated from service with just cause.

Ruling:
 Proof beyond reasonable doubt is not required as a basis for
judgment on the legality of an employer’s dismissal of an employee, nor
even preponderance of evidence for that matter, substantial evidence
being sufficient. In the instant case, while there may be no denying that
respondent’s medical card had falsified entries in it, SMC was unable to
prove, by substantial evidence, that it was respondent who made the
unauthorized entries. Besides, SMC’s (Your) Guide on Employee
Conduct punishes the act of falsification of company records or
documents; it does not punish mere possession of a falsified document.
 When SMC imposed the penalty of dismissal for the 12th and 13th
AWOPs, it was acting well within its rights as an employer.
 An employer has the prerogative to prescribe reasonable rules
and regulations necessary for the proper conduct of its business, to
provide certain disciplinary measures in order to implement said rules
and to assure that the same would be complied with.
 An employer enjoys a wide latitude of discretion in
the promulgation of policies, rules and regulations on work-related
activities of the employees.
 It is axiomatic that appropriate disciplinary sanction is within the
purview of management imposition. Thus, in the implementation of its
rules and policies, the employer has the choice to do so strictly or not,
since this is inherent in its right to control and manage its business
effectively.
 Consequently, management has the prerogative to
impose sanctions lighter than those specifically prescribed by its rules, or
to condone completely the violations of its erring employees.
 Of course, this prerogative must be exercised free of grave
abuse of discretion, bearing in mind the requirements of justice and fair
play.
 All told, we find SMC acted well within its rights when it
dismissed respondent for his numerous absences. Respondent was
afforded due process and was validly dismissed for cause

Malting vs Coros October 13, 2010

Facts:
 After his dismissal by Matling as its Vice President for Finance
and Administration, the respondent filed on August 10, 2000 a complaint
for illegal suspension and illegal dismissal against Matling and some of
its corporate officers in the NLRC.
 The petitioners moved to dismiss the complaint, raising the
ground, among others, that the complaint pertained to the jurisdiction of
the Securities and Exchange Commission (SEC) due to the controversy
being intracorporate inasmuch as the respondent was a member of
Matlings Board of Directors aside from being its Vice-President for
Finance and Administration prior to his termination.
 The respondent opposed the petitioners motion to dismiss,
insisting that his status as a member of Matlings Board of Directors was
doubtful, considering that he had not been formally elected as such; that
he did not own a single share of stock in Matling, considering that he had
been made to sign in blank an undated indorsement of the certificate of
stock he had been given in 1992; that Matling had taken back and
retained the certificate of stock in its custody; and that even assuming
that he had been a Director of Matling, he had been removed as the Vice
President for Finance and Administration, not as a Director, a fact that
the notice of his termination dated April 10, 2000 showed.
 On October 16, 2000, the LA granted the petitioners motion to
dismiss, ruling that the respondent was a corporate officer because he
was occupying the position of Vice President for Finance and
Administration and at the same time was a Member of the Board of
Directors of Matling; and that, consequently, his removal was a corporate
act of Matling and the controversy resulting from such removal was
under the jurisdiction of the SEC, pursuant to Section 5, paragraph (c) of
Presidential Decree No. 902.

Issue: WON the respondent is a corporate officer within the jurisdiction

of the regular courts.

Ruling:
 No. As a rule, the illegal dismissal of an officer or other employee
of a private employer is properly cognizable by the LA. This is pursuant
to Article 217 (a) 2 of the Labor Code
 Where the complaint for illegal dismissal concerns a corporate
officer, however, the controversy falls under the jurisdiction of the
Securities and Exchange Commission (SEC), because the controversy
arises out of intra-corporate or partnership relations between and among
stockholders, members, or associates, or between any or all of them and
the corporation, partnership, or association of which they are
stockholders, members, or associates, respectively; and between such
corporation, partnership, or association and the State insofar as the
controversy concerns their individual franchise or right to exist as such
entity; or because the controversy involves the election or appointment of
a director, trustee, officer, or manager of such corporation, partnership, or
association. Such controversy, among others, is known as an intra-
corporate dispute.
 Effective on August 8, 2000, upon the passage of Republic Act
No. 8799, otherwise known as The Securities Regulation Code, the
SECs jurisdiction over all intra-corporate disputes was transferred to the
RTC, pursuant to Section 5.2 of RA No. 8799.
 The office of Vice President for Finance and Administration
created by Matlings President pursuant to By Law No. V was an ordinary,
not a corporate, office.
 The criteria for distinguishing between corporate officers who
may be ousted from office at will, on one hand, and ordinary corporate
employees who may only be terminated for just cause, on the other
hand, do not depend on the nature of the services performed, but on the
manner of creation of the office.
 In the respondent’s case, he was supposedly at once an
employee, a stockholder, and a Director of Matling. The circumstances
surrounding his appointment to office must be fully considered to
determine whether the dismissal constituted an intra-corporate
controversy or a labor termination dispute. We must also consider
whether his status as Director and stockholder had any relation at all to
his appointment and subsequent dismissal as Vice President for Finance
and Administration.

Halaguena vs PAL October 2, 2009

Facts:
 Petitioners were employed as flight attendants of respondent on
different dates prior to November 1996. They are members of FASAP
union exclusive bargaining organization of the flight attendants, flight
stewards and pursers. On July 2001, respondent and FASAP entered
into a CBA incorporating the terms and conditions of their agreement for
the years 2000 to 2005 (compulsory retirement of 55 for female and 60
for males).
 In July 2003, petitioner and several female cabin crews, in a
letter, manifested that the provision in CBA on compulsory retirement is
discriminatory. On July 2004, petitioners filed a Special Civil Action for
Declaratory Relief with issuance of TRO with the RTC Makati. The RTC
issued a TRO. After the denial of the respondent on its motion for
reconsideration for the TRO, it filed a Petition with the CA. CA granted
respondent’s petition and ordered lower court to dismiss the case.
Hence, this petition.

Issue: WON 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 Georg Grotjahn 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.
 Jurisdiction of the court is determined on the basis of the
material allegations of the complaint and the character of the relief
prayed for irrespective of whether plaintiff is entitled to such relief.
 In the case at bar, the allegations in the petition for declaratory
relief plainly show that petitioners' cause of action is the annulment of
Section 144, Part A of the PAL-FASAP CBA.
 it is clear that the issue raised is whether Section 144, Part A of
the PAL-FASAP CBA is unlawful and unconstitutional.
 Being an ordinary civil action, the same is beyond the jurisdiction
of labor tribunals.

Marc II vs Joson

Facts:
 Petitioner Marc II Marketing, Inc. (petitioner corporation) is a
corporation duly organized and existing under and by virtue of the laws of
the Philippines.
 It is primarily engaged in buying, marketing, selling and
distributing in retail or wholesale for export or import household
appliances and products and other items.
 It took over the business operations of Marc Marketing, Inc.
which was made non-operational following its incorporation and
registration with the Securities and Exchange Commission (SEC).
 Petitioner Lucila V. Joson (Lucila) is the President and majority
stockholder of petitioner corporation. She was also the former President
and majority stockholder of the defunct Marc Marketing, Inc.
 Respondent Alfredo M. Joson (Alfredo), on the other hand, was
the General Manager, incorporator, director and stockholder of petitioner
corporation.
 Prior to the incorporation of the petitioner corporation,
respondent was already working with Lucila as General Manager of Marc
Marketing, as it was formalize by a Management Contract which he
entered under the letterhead of Marc Marketing. Respondent was a
corporate officer by the express provision of Section 1, Article IV of its by-
laws.
 As the petitioner corporation officially incorporated, Marc
Marketing stopped its operation and respondent continued to function as
General Manager in the petitioner corporation as he was appointed on 29
August 1994 as one of the corporate officers as evidence by the undated
Secretary’s Certificate.
 On 30 June 1997, Petitioner’s corporation decided to stop and
cease its operations, as evidenced by an Affidavit of Non-Operation due
to poor sales collection aggravated by the inefficient management of its
affairs.
 It formally informed respondent of the cessation of its business
operation and was apprised of the termination of his services since his
services as such would no longer be necessary for the winding up of its
affairs.
 Aggrieved respondent filed a Complaint for Reinstatement and
Money Claim against petitioners before the Labor Arbiter.
 Parties were not settled amicably hence L.A. ordered them to
submit their respective Position Papers. Petitioners opted to file a Motion
to Dismiss grounded on the Labor Arbiter’s lack of jurisdiction as the
case involved an intra-corporate controversy, which jurisdiction belongs
to the SEC [now with the Regional Trial Court (RTC)]. Consequently
petitioners failed to submit their Position Paper despite the extension
they asked. Accordingly, the case was submitted for resolution and
treated their Motion to Dismiss as their Position Paper.
 LA - Respondent was a mere employee of the petitioner
corporation, thus the existence of employer-employee relationship falls
its jurisdiction under the L.A.
 NLRC - Respondent was a corporate officer as evidence by the
undated Secretary’s Certificated, that on the Board of Directors’ meeting,
the former was appointed as such.
 CA - Affirmed the findings of LA.
Issue: Which between the Labor Arbiter or the RTC, has jurisdiction
over respondent’s dismissal as General Manager of petitioner
corporation.
Ruling:
 This Court rules that respondent was not a corporate officer of
Petitioner’s corporation because his position as General Manager was
not specifically mentioned in the roster of corporate officers in its
corporate by-laws. The enabling clause in petitioner corporation’s by-
laws empowering its Board of Directors to create additional officers, i.e.,
General Manager, and the alleged subsequent passage of a board
resolution to that effect cannot make such position a corporate office.
Matling clearly enunciated that the board of directors has no power to
create other corporate offices without first amending the corporate by-
laws so as to include therein the newly created corporate office. Though
the board of directors may create appointive positions other than the
positions of corporate officers, the persons occupying such positions
cannot be viewed as corporate officers under Section 25 of the
Corporation Code.
 Respondent, though occupying the General Manager position,
was not a corporate officer of petitioner corporation rather he was merely
its employee occupying a high-ranking position.
 Accordingly, respondent’s dismissal as petitioner corporation
General Manager did not amount to an intra-corporate controversy.
Jurisdiction therefore properly belongs with the Labor Arbiter and not with
the RTC.

PAL vs Zamora Nov 23, 2007

Facts:
 Bernardin J Zamora was a cargo representative assigned at the
International Cargo Operations - Import Operations Division (ICO-IOD) of
petitioner Philippine Airlines, Inc.
 He alleged that sometime in December 1993, his immediate
supervisor, Ricardo D. Abuyuan, instructed him to alter some entries in a
custom report to conceal Abuyuan’s smuggling and pilferage activities.
 When he refused to follow this order, Abuyuan concocted
charges of insubordination and neglect of customers against him
 He was temporary transferred to Domestic Cargo Operations
However he refused to follow the directive because: first, there was no
valid and legal reason for his transfer; second, the transfer violated the
collective bargaining agreement between the management and the
employees union that no employee shall be transferred without just and
proper cause; and third, the transfer did not comply with the 15-day prior
notice rule.
 He wrote to the management requesting that an investigation be
conducted on the smuggling and pilferage activities
 As a result, the management invited Zamora to several
conferences to substantiate his allegations but he was instructed the
other way
 PAL claimed that sometime in October 1995, Zamora had an
altercation with Abuyuan to the point of a fistfight and to diffuse the
tension between the parties, the management decided to temporarily
transfer Zamora to the DCO
 Refuse to report to DCO, he was reported absent, his salaries
were withheld and then finally, he was informed of his termination.
 Zamora filed an action for illegal dismissal, unfair labor practice,
non-payment of wages, and damages.
 LA – dismissed for lack of merit
 NLRC – reversed LA decision

Issue: Whether the decision of the NLRC had become final and
executory

Ruling:
 No. PAL contends that other than the Certification issued by the
NLRC Deputy Executive Clerk, there was no evidence that service of
the NLRC decision via registered mail was deemed completed as
of August 16, 1999, or five days after the first notice on August 11,
1999. It adds that a certification from the postmaster was the best
evidence to prove completeness of the service by mail.
 PAL also avers that when it received a copy of the NLRC
resolution denying Zamora’s motion for partial reconsideration of the
NLRC decision, it immediately filed a motion to be furnished with a copy of
the NLRC decision. Acting on the motion, the NLRC furnished it with a
copy of the NLRC decision which it received on October 26, 1999. Since it
filed its motion for reconsideration on October 29, 1999, PAL argues that
its motion was seasonably filed and the NLRC decision did not become
final and executory.
 The rule on service by registered mail contemplates two
situations: (1) actual service, the completeness of which is determined
upon receipt by the addressee of the registered mail; and (2) constructive
service, the completeness of which is determined upon expiration of five
days from the date the addressee received the first notice of the
postmaster. A party who relies on constructive service or who contends
that his adversary has received a copy of a final order or judgment upon
the expiration of five days from the date the addressee received the first
notice sent bwy the postmaster must prove that the first notice was
actually received by the addressee. Such proof requires a certified or
sworn copy of the notice given by the postmaster to the addressee.

Larkins vs NLRC February 23, 1995

Facts:
 T/Sgt Aldora Larkins was a member of the United States Air
Force (USAF) assigned to oversee the dormitories of the Third Aircraft
Generation Squadron (3 AGS) at Clark Air Base, Pampanga.
 3 AGS terminated the contract for the maintenance and upkeep
of the dormitories with the De Guzman Custodial Services. The
employees thereof, including private respondents, were allowed to
continue working for 3 AGS. It was left to the new contractor, the JAC
Maintenance Services owned by Joselito Cunanan, to decide whether it
would retain their services.
 Joselito Cunanan, however, chose to bring in his own workers.
As a result, the workers of the De Guzman Custodial Services were
requested to surrender their base passes to Lt. Col. Frankhauser or to
petitioner.
 Private respondents filed a complaint with the NLRC, San
Fernando, Pampanga, against petitioner, Lt. Col. Frankhauser, and
Cunanan for illegal dismissal and underpayment of wages.
 Petitioner and Lt. Col. Frankhauser failed to answer the
complaint and to appear at the hearings. They, likewise, failed to submit
their position paper, which the Labor Arbiter deemed a waiver on their
part to do so. The case was therefore submitted for decision on the basis
of private respondents' position paper and supporting documents.
 LA –found them guilty of illegal dismissal and ordered them to
reinstate private respondents with full back wages, or if that is no longer
possible, to pay private respondents' separation pay
 Petitioner appealed to the NLRC claiming that the Labor Arbiter
never acquired jurisdiction over her person because no summons or
copies of the complaints, both original and amended, were ever served
on her.
 NLRC affirmed the LA’s decision
 Petitioner moved for reconsideration, which NLRC denied
 the OSG filed a Manifestation stating that it "cannot legally
support the decision of the Labor Arbiter" and therefore prayed that it be
relieved from the responsibility

Issue: WON the Labor Arbiter acquires jurisdiction over the petitioner.

Ruling:
 No. The "Agreement Between the Republic of the Philippines
and the United States of America Concerning Military Bases," otherwise
known as the R.P. - U.S. Military Bases Agreement, governed the rights,
duties, authority, and the exercise thereof by Philippine and American
nationals inside the U.S. military bases in the country.
 Summonses and other processes issued by Philippine courts
and administrative agencies for United States Armed Forces personnel
within any U.S. base in the Philippines could be served therein only with
the permission of the Base Commander. If he withholds giving his
permission, he should instead designate another person to serve the
process, and obtain the server's affidavit for filing with the appropriate
court.
 Respondent Labor Arbiter did not follow said procedure. He
instead, addressed the summons to Lt. Col. Frankhauser and not the
Base Commander
 Unquestionably therefore, no jurisdiction was ever acquired by
the Labor Arbiter over the case and the person of petitioner and the
judgment rendered is null and void

US vs Rodrigo

Facts:
 These are cases that have been consolidated because they all
involve the doctrine of state immunity. The United States of America was
not impleaded in the case at bar but has moved to dismiss on the ground
that they are in effect suits against it to which it has not consented.
 USA vs GUINTO (GR No. 76607)
 The private respondents are suing several officers of the US Air
Force in Clark Air Base in connection with the bidding conducted by them
for contracts for barber services in the said base, which was won by
Dizon. The respondents wanted to cancel the award because they
claimed that Dizon had included in his bid an area not included in the
invitation to bid, and also, to conduct a rebidding.
 USA vs RODRIGO (GR No. 79470)
 Genove filed a complaint for damages for his dismissal as cook
in the US Air Force Recreation Center at Camp John Hay Air Station. It
had been ascertained after investigation that Genove had poured urine
into the soup stock used in cooking the vegetables served to the club
customers. The club manager suspended him and thereafter referred the
case to a board of arbitrators, which unanimously found him guilty and
recommended his dismissal.
 USA vs CEBALLOS (GR No. 80018)
 Bautista, a barracks boy in Camp O’ Donnell, was arrested
following a buy-bust operation conducted by petitioners, who were USAF
officers and special agents of the Air Force Office. An information was
filed against Bautista and at the trial, petitioners testified against him. As
a result of the charge, Bautista was dismissed from his employment. He
then filed for damages against petitioners claiming that it was because of
the latter’s acts that he lost his job.

 USA vs VERGARA (GR No. 80258)

 A complaint for damages was filed by private respondents
against petitioners (US military officers) for injuries allegedly sustained by
the former when defendants beat them up, handcuffed them and
unleashed dogs on them. The petitioners deny this and claim that
respondents were arrested for theft but resisted arrest, thus incurring the
injuries.

Issue: WON the defendants were immune from suit under the RP-US
Bases Treaty for acts done by them in the performance of their official
duties.

Ruling:
 The rule that a State may not be sued without its consent is one
of the generally accepted principles of international law that were have
adopted as part of the law of our land. Even without such affirmation, we
would still be bound by the generally accepted principles of international
law under the doctrine of incorporation. Under this doctrine, as accepted
by the majority of the states, such principles are deemed incorporated in
the law of every civilized state as a condition and consequence of its
membership in the society of nations. All states are sovereign equals and
cannot assert jurisdiction over one another. While the doctrine appears to
prohibit only suits against the state without its consent, it is also
applicable to complaints filed against officials of the states for acts
allegedly performed by them in the discharge of their duties. The rule is
that if the judgment against such officials will require the state itself to
perform an affirmative act to satisfy the same, the suit must be regarded
as against the state although it has not been formally impleaded. When
the government enters into a contract, it is deemed to have descended to
the level of the other contracting party and divested of its sovereign
immunity from suit with its implied consent.
 It bears stressing at this point that the aforesaid principle do not
confer on the USA a blanket immunity for all acts done by it or its agents
in the Philippines. Neither may the other petitioners claim that they are
also insulated from suit in this country merely because they have acted
as agents of the United States in the discharge of their official functions.
 There is no question that the USA, like any other state, will be
deemed to have impliedly waived its non-suability if it has entered into a
contract in its proprietary or private capacity (commercial acts/jure
gestionis). It is only when the contract involves its sovereign or
governmental capacity (governmental acts/jure imperii) that no such
waiver may be implied.

 In US vs GUINTO, the court finds the barbershops subject to the

concessions granted by the US government to be commercial
enterprises operated by private persons. The Court would have directly
resolved the claims against the defendants as in USA vs RODRIGO,
except for the paucity of the record as the evidence of the alleged
irregularity in the grant of the barbershop concessions were not
available. Accordingly, this case was remanded to the court below for
further proceedings.
 In US vs RODRIGO, the restaurant services offered at the John
Hay Air Station partake of the nature of a business enterprise undertaken
by the US government in its proprietary capacity, as they were operated
for profit, as a commercial and not a governmental activity. Not even the
US government can claim such immunity because by entering into the
employment contract with Genove in the discharge of its proprietary
functions, it impliedly divested itself of its sovereign immunity from suit.
But, the court still dismissed the complaint against petitioners on the
ground that there was nothing arbitrary about the proceedings in the
dismissal of Genove, as the petitioners acted quite properly in
terminating Genove’s employment for his unbelievably nauseating act.
 In US vs CEBALLOS, it was clear that the petitioners were acting
in the exercise of their official functions when they conducted the buy-
bust operation and thereafter testified against the complainant. For
discharging their duties as agents of the United States, they cannot be
directly impleaded for acts imputable to their principal, which has not
given its consent to be sued.
 In US vs VERGARA, the contradictory factual allegations in this
case need a closer study of what actually happened. The record was too
meager to indicate if the defendants were really discharging their official
duties or had actually exceeded their authority when the incident
occurred. The needed inquiry must first be made by the lower court so it
may assess and resolve the conflicting claims of the parties.
NOTE:
 A state may be said to have descended to the level of an
individual and can thus be deemed to have tacitly given its consent to be
sued only when it enters into business contracts.
 Jure Gestionis – by right of economic or business relations, may
be sued.
 Jure Imperii – by right of sovereign power, in the exercise of
sovereign functions. No implied consent.

Tolosa vs NLRC April 10, 2003

Facts:
 Evelyn Tolosa was the widow of Captain Virgilio Tolosa who was
hired by Qwana-Kaiun, through its manning agent, Asia Bulk Transport
Phils. Inc., to be the master of the Vessel named M/V Lady Dona.
 Sometime on November 6, 1992, CAPT. TOLOSA was drenched
with rainwater.
 The following day he had a slight fever and in the succeeding
twelve (12) days, his health rapidly deteriorated resulting in his death
 According to Pedro Garate, Chief Mate of the Vessel
experienced high fever and suffered from LBM then also slipped in the
toilet and suffered scratches at the back of his waist
 He was given first aid and then he was confined but his condition
was worsened
 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 Department of Labor
and Employment (NLRC)
 LA – ordered to hold respondents solidarily liable
 Private Respondents raised an appeal
 CA - labor commission had no jurisdiction over the subject
matter, the cause did not arise from an employer-employee relation, but
from a quasi delict or tort.
Issue: WON the NLRC has jurisdiction over the case

Ruling:
 No. It is the character of the principal relief sought that appears
essential in this connection. Where such principal relief is to be granted
under labor legislation or a collective bargaining agreement, the case
should fall within the jurisdiction of the Labor Arbiter and the NLRC, even
though a claim for damages might be asserted as an incident to such
claim.
 The labor arbiter found private respondents to be grossly
negligent. He ruled that Captain Tolosa, who died at age 58, could expect
to live up to 65 years and to have an earning capacity of US$176,400.
 It must be noted that a workers loss of earning capacity and
blacklisting are not to be equated with wages, overtime compensation or
separation pay, and other labor benefits that are generally cognized in
labor disputes. The loss of earning capacity is a relief or claim resulting
from a quasi delict or a similar cause within the realm of civil law.
 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, petitioners 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.[24] Thus, claims for an employers 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. [25] Since petitioners 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.
Sanyo vs Canizares July 8, 1992

Facts:
 PSSLU had an existing CBA with Sanyo Philippines Inc. effective
July 1, 1989 to June 30, 1994:
 Sec. 2. All members of the union covered by this agreement
must retain their membership in good standing in the union as condition
of his/her continued employment with the company. The union shall have
the right to demand from the company the dismissal of the members of
the union by reason of their voluntary resignation from membership or
willful refusal to pay the Union Dues or by reasons of their having
formed, organized, joined, affiliated, supported and/or aided directly or
indirectly another labor organization, and the union thus hereby
guarantees and holds the company free and harmless from any liability
whatsoever that may arise consequent to the implementation of the
provision of this article.
 Some of the employees, herein respondents, were cancelled of
their membership, and appears that are not members of PSSLU but of
another union, KAMAO.
 Some officers of KAMAO, which included Yap, Salvo, Baybon,
Solibel, Valencia, Misterio and Ricohermoso, executed a pledged of
cooperation with PSSLU promising cooperation with the latter union and
among others, respecting, accepting and honoring the CBA between
Sanyo
 PSSLU through its national and local presidents, wrote another
letter to Sanyo recommending the dismissal of the following non-union
workers: Bernardo Yap, Arnel Salvo, Renato Baybon, Reynaldo
Ricohermoso, Salvador Solibel, Benito Valencia, and Allan Misterio,
allegedly because: 1) they were engaged and were still engaging in anti-
union activities; 2) they willfully violated the pledge of cooperation with
PSSLU which they signed and executed on February 14, 1990; and 3)
they threatened and were still threatening with bodily harm and even
death the officers of the union
 Also recommended for dismissal of some other union members
who allegedly joined, supported and sympathized with a minority union,
KAMAO
 The company received no information on whether or not said
employees appealed to PSSLU. Hence, it considered them dismissed.
 The dismissed employees filed a complaint with the NLRC for
illegal dismissal
 PSSLU filed a motion to dismiss the complaint alleging that the
Labor Arbiter was without jurisdiction over the case relying that cases
arising from the interpretation or implementation of the collective
bargaining agreements shall be disposed of by the labor arbiter by
referring the same to the grievance machinery and voluntary arbitration.
 The complainants opposed the motion to dismiss complaint on
these grounds: 1) the series of conferences before the National
Conciliation and Mediation Board had been terminated; 2) the NLRC
Labor Arbiter had jurisdiction over the case which was a termination
dispute pursuant to Article 217 (2) of the Labor Code; and 3) there was
nothing in the CBA which needs interpretation or implementation

Issue: WON the LA has jurisdiction over the said case

Ruling:
 Yes. The case at bar does not involve an "interpretation or
implementation" of a collective bargaining agreement or "interpretation or
enforcement" of company policies but involves a "termination." 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
by voluntary arbitration. Where there was already actual
termination, i.e., violation of rights, it is already cognizable by the Labor
Arbiter.
 It was provided in the CBA executed between PSSLU and Sanyo
that a member's voluntary resignation from membership, willful refusal to
pay union dues and his/her forming, organizing, joining, supporting,
affiliating or aiding directly or indirectly another labor union shall be a
cause for it to demand his/her dismissal from the company. The demand
for the dismissal and the actual dismissal by the company on any of
these grounds is an enforcement of the union security clause in the CBA.
This act is authorized by law provided that enforcement should not be
characterized by arbitrariness and always with due process
 The reference to a Grievance Machinery and Voluntary
Arbitrators for the adjustment or resolution of grievances arising from the
interpretation or implementation of their CBA and those arising from the
interpretation or enforcement of company personnel policies is
mandatory. The law grants to voluntary arbitrators 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
 In the instant case, however, we hold that the Labor Arbiter and
not the Grievance Machinery provided for in the CBA has the jurisdiction
to hear and decide the complaints of the private respondents. While it
appears that the dismissal of the private respondents was made upon
the recommendation of PSSLU pursuant to the union security clause
provided in the CBA, We are of the opinion that these facts do not come
within the phrase "grievances arising from the interpretation or
implementation of (their) Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company personnel
policies," the jurisdiction of which pertains to the Grievance Machinery or
thereafter, to a voluntary arbitrator or panel of voluntary arbitrators.
Article 260 of the Labor Code on grievance machinery and voluntary
arbitrator states that "(t)he parties to a Collective Bargaining Agreement
shall include therein provisions that will ensure the mutual observance of
its terms and conditions. They shall establish a machinery for the
adjustment and resolution of grievances arising from the interpretation or
implementation of their Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company personnel
policies." It is further provided in said article that the parties to a CBA
shall name or designate their respective representatives to the grievance
machinery and if the grievance is not settled in that level, it shall
automatically be referred to voluntary arbitrators (or panel of voluntary
arbitrators) designated in advance by the parties. It need not be
mentioned that the parties to a CBA are the union and the company.
Hence, only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators.

Oriental Ship Management vs Bastol June 29, 2010

Facts:
 OSCI hired Romy B. Bastol (Bastol) as bosun on November 29,
1995 evidenced by a Contract of Employment
 On December 5, 1995, Bastol was deployed on board the vessel
MV Felicita.
 The genesis of the instant case emerged when, on February 17,
1997, while on board the vessel, Bastol suffered chest pains and cold
clammy perspiration. He was hospitalized in Algiers and found to be
suffering from anterior myocardial infarction.In short, he had a heart
attack. He was subsequently repatriated due to his illness on March 7,
1997.
 Upon arrival here in the Philippines, on March 8, 1997, he was
referred to the Jose L. Gutierrez Clinic in Malate, Manila for a follow-up
examination where Dr. Achilles J. Peralta examined and found him to be
suffering from T/C Ischemic Heart Disease. Ant. Myocardial Infection. Dr.
Peralta issued a Medical Report certifying that he was Unfit for Sea
Duty. In a follow-up medical examination on April 1, 1997, Dr. Peralta still
found Bastol Unfit for Sea Duty.
 PPI referred Bastol for medical treatment to
the Metropolitan Hospital under the care of company-designated
physician Dr. Robert D. Lim, then certified that Bastol had Coronary
artery dse; S/P Ant. wall MP; Hypercholesterolemia; Hyperglycemia
 Unsatisfied with the treatment by Dr. Lim and seeking a second
opinion, he went to Dr. Efren R. Vicaldo, a Cardiologist and Congenital
Heart Disease Specialist of the Philippine Heart Center, who diagnosed
him to be suffering from Coronary Artery Disease and Extensive
Anteriorseptalmia with the corresponding remarks: For Disability,
Impediment Grade 1 (120%).
 Feeling abandoned and aggrieved with OSCI and PSL, Bastol,
through counsel, sent a November 27, 1997 letter on December 2, 1997
to Capt. Rosendo C. Herrera, the President of OSCI, for a possible
settlement of his claim for disability benefits.
 He attached the Medical Certificate issued by Dr. Vicaldo. His
letter did not merit a response from OSCI.
 Thus, Bastol was compelled to file a Complaint before the Labor
Arbiter
 OSCI countered that Bastol is not entitled to his indemnity
claims, among others, for disability benefits on account of non-
compliance with the requirements of the 1994 revised Standard
Employment Contract (SEC) by failing to properly submit himself for
treatment and examination by the company-designated physician who is
the only one authorized to set the degree of disability
 LA – decide in favour of respondent
 OSCI immediately assailed the above Labor Arbiter decision
before the NLRC. Vacating, setting aside, and remanding the case back
to LA
 In remanding the case back to the Labor Arbiter, the NLRC ruled
that Bastol should have presented himself before the Labor Arbiter for
the latter to properly assess his condition, and that Dr. Lim and Dr.
Vicaldo should be presented to determine with certainty the status of
Bastols heart ailment.
 CA – reversed NLRC / reinstate LA

Issue:
 Whether the Complaint filed before the Labor Arbiter ought to be
dismissed for lack of certification against forum shopping as required by
the Rules and whether the verification by counsel is sufficient for Bastols
Position Paper and Manifestation/Compliance

Ruling:
 No. OSCI argues that the Complaint of Bastol ought to have
been dismissed at the outset, i.e., before the labor arbiter level, since it is
an initiatory pleading which lacked the mandatorily required certification
of non-forum shopping under Sec. 5, Rule 7 of the Rules of Court.
 The foregoing arguments are untenable. For the expeditious and
inexpensive filing of complaints by employees, the Regional Arbitration
Branch (RAB) of the NLRC provides pro-forma complaint forms. This is
to facilitate the exercise and protection of employees rights by the
convenient assertion of their claims against employers untrammeled by
procedural rules and complexities. To comply with the certification
against forum shopping requirement, a simple question embodied in the
Complaint form answerable by yes or no suffices. Employee-
complainants are not even required to have a counsel before they can
file their complaint. An officer of the RAB, duly authorized to administer
oaths, is readily available to facilitate the execution of the required
subscription or jurat of the complaint.
 This can be seen in the case at bar. Bastol, assisted by counsel,
filled out the Complaint form, line No. 11 of which is a question on anti-
forum shopping which he answered by underlining the word No. [48] It is
thus clear that the strict application of Sec. 4, Rule 7 of the Rules of
Court does not apply to labor complaints filed before the NLRC RAB.
 In the same vein, OSCI contends that Bastols Position Paper
and Manifestation/Compliance ought to have been considered as
unsigned pleadings which produce no legal effect under Sec. 3, Rule 7 of
the Rules of Court for violation of Sec. 4, Rule 7, requiring verification to
be made upon personal knowledge or based on authentic records,
because said pleadings were verified only by counsel, which verification
is clearly not based on personal knowledge or based on authentic
records.

Miranda vs Asian Terminals June 23, 2009

Facts:
 Petitioner Teodorico S. Miranda, Jr. was employed by
respondent ATI in 1991 as Checker I. He also becaxme a member of the
Associated Port Checkers and Workers Union (APCWU or the union).
On April 10, 1992, the petitioner, who was then the Vice President of the
union, was appointed to the position of Shop Steward which is a union
position under the payroll of the company. The Collective Bargaining
Agreement (CBA) between the union and ATI provided for the
appointment of a Shop Steward from among the union members, upon
the recommendation of the union president. The Shop Steward is a field
representative of both the company and the union and acts as an
independent arbiter of all complaints brought to his attention.[
 On December 28, 1993, Roger P. Silva, the President of
APCWU, wrote a letter to the petitioner regarding the recall of his
designation as the union Shop Steward. The union president explained
that the petitioner was recalled as union Shop Steward due to loss of
trust and confidence in him, pursuant to the “Agreement Amending the
MPSI (Marina Port Services, Inc.) - APCWU CBA.” The letter further
stated that the petitioner refused to heed the union president’s reminders
concerning his “chronic absenteeism” that “is hurting the interest of the
Union members as they are left with no responsible union officer when
summoned for investigation concerning alleged infractions of company
rules.”
 Upon the conclusion of the investigation, the grievance
committee issued its report recommending to ATI the recall of the
petitioner as Shop Steward and for his reversion to his former position of
Checker I, in accordance with the CBA. The petitioner questioned his
recall as union Shop Steward, and the union president, Roger P. Silva,
issued a letter which reasoned that the petitioner’s recall as Shop
Steward was pursuant to Section 13 of the Agreement Amending the
MPSI-APCWU CBA, amending Section 2, Article V of the MPSI-APCWU
CBA which required that the term of office of the Shop Steward shall be
based on trust and confidence and favorable recommendation of the duly
elected president of the Union.
 The petitioner argues that he is entitled to claim reinstatement as
Shop Steward as well as the payment of his backwages pending the
respondent’s appeal. He further contends that the Court of Appeals erred
in dismissing his consolidated petitions which prayed for the enforcement
of his reinstatement as Shop Steward for being moot and academic.
 The respondent, on the other hand, maintains that both the
NLRC and the Court of Appeals relied on substantial evidence in arriving
at their decision that the consolidated petitions are already moot and
academic in view of the previous reinstatement of the petitioner to
Checker I and his retrenchment and separation from ATI since October
31, 2001.

Issue: WON the Labor Arbiter has jurisdiction over the dispute

Ruling:
 No. The Labor Arbiter incorrectly assumed jurisdiction over the
case due to his confused understanding of the relationship between and
among the petitioner, respondent company and the union and his
decision on the merits of the case is void for lack of jurisdiction. His
disposition of the case, ordering the respondent to pay indemnity for
failure to observe due process in the supposed demotion of the petitioner
from union Shop Steward to Checker I, cannot be upheld.
 The Labor Arbiter held that the respondent company should not
have merely affirmed the recommendation of the union to recall the
petitioner and return him to Checker I, his previous position. He reasons
that the respondent should have conducted its own investigation before it
supposedly demoted petitioner from union Shop Steward to Checker I.
The requirements imposed on an employer for the valid demotion of an
employee do not apply to the reversion of petitioner from union Shop
Steward to Checker I because the decision to recall the petitioner from
union Shop Steward to Checker I is for the union, not the respondent
company, to make. The respondent cannot and should not conduct its
own investigation to determine whether the union had cause to recall the
petitioner from union Shop Steward because the dispute is an intra-union
dispute.
 Petitioner cannot be reinstated to Shop Steward due to his valid
retrenchment

Manese vs Jollibee October 11, 2012

Facts:
 Petitioners were employees of respondent Jollibee Foods
Corporation (Jollibee). At the time of their termination, petitioner Manese,
Cruz and Peñano were managerial employees.
 Petitioners were part of the team tasked to open a new Jollibee
branch at Festival Mall, Level 4, in Alabang,Muntinlupa City on
December 12, 2000. However, the opening of the store was postponed
thrice. In preparation for the opening of the new branch, petitioner Cruz
requested the commissary for the delivery of the product called
“Chickenjoy”.
 When the opening was rescheduled to December 24, 2000,
petitioner Cruz made another requisition for the delivery of the food on
December 23, 2000, but the opening date was again postponed to
December 28, 2000. Petitioner Cruz did not cancel the request for
delivery of the products.
 On December 23, 2000, 450 packs of Chickenjoy were delivered
and petitioners placed them in the freezer.
 On December 26, 2000, petitioner Cruz thawed the 450 packs of
Chickenjoy (ten pieces in each pack), or 4,500 pieces of Chickenjoy, in
time for the branch opening on December 28, 2000. The shelf life of the
Chickenjoy is 25 days from the time it is marinated; and, once thawed, it
should be served on the third day. Its shelf life cannot go beyond three
days from thawing.
 After that, the remaining Chickenjoy products are no longer
served. Within the period provided for in the company policy, valid
Chickenjoy rejects are usually returned to the commissary, while rejects
which are unreturnable are wasted and disposed of properly.
 The sales targets of for the first and second day were not
reached. Sometime in January 2001, petitioner Cruz attempted to return
150 pieces of Chickenjoy rejects to the commissary, but the driver of the
commissary refused to accept them due to its discoloration and
deteriorated condition, and for fear that the rejects may be charged
against him. Thus, the Chickenjoy rejects were returned to the freezer.
During the first week of March 2001, the team of petitioners had a
meeting on what to do with the stored Chickenjoy rejects. They decided
to soak and clean the Chickenjoy rejects in soda water and segregate
the valid rejects from the wastes.
 On April 2, 2001, petitioner Cruz was transferred to Jollibee Shell
South Luzon Tollway branch in Alabang, Muntinlupa. She failed to make
the proper indorsement as the area manager directed her to report
immediately to her new assignment.
 On May 3, 2001, the area manager, Evangelista visited the
subject Jollibee branch at Festival Mall. Evangelista told petitioner
Manese to dispose of the Chickenjoy rejects, but Manese replied that
they be allowed to find a way to return them to the Commissary.
 On May 8, 2001, Evangelista required petitioners Cruz and
Manese to submit an incident report on the Chickenjoy rejects. On May
10, 2001, a corporate audit was conducted to spot check the waste
products. According to the audit, 2,130pieces of Chickenjoy rejects were
declared wastage.
 On May 15, 2001, Evangelista issued a memorandum with a
charge sheet requiring petitioners to explain in writing within 48 hours
from receipt why they should not be meted the appropriate penalty under
the respondent company's Code of Discipline for extremely serious
misconduct, gross negligence, product tampering, fraud or falsification of
company records and insubordination in connection with their findings
that 2,130 pieces of Chickenjoy rejects were kept inside the walk-in
freezer, which could cause product contamination and threat to food
safety.
 The petitioners and other store managers submitted their
respective letters of explanation.
 Thereafter, respondent’s Investigating Committee conducted an
administrative hearing on the incident. Subsequently, the Investigating
Committee sent petitioners Cruz, Manese and Peñano each received
a Memorandum on its administrative findings and decision, notifying
each of their termination from employment due to loss of trust
andconfidence. Thereafter, petitioners Manese, Cruz and Peñano filed a
Complaint against respondents for illegal dismissal.
 On July 31, 2003, the Labor Arbiter (LA) rendered a Decision
dismissing the complaints for illegal dismissal of complainants Manese
and Peñano for want of merit. However, the complaint for illegal
dismissal filed by Cruz is resolved in her favor, against Jollibee. Jollibee
was held liable for separation pay instead of reinstatement. The LA
stated that at the time the incident was discovered on May 3, 2001, Cruz
was no longer working at Jollibee Festival Mall, Level 4, as she was
already transferred to a different Jollibee branch on April 2, 2001. Thus,
the LA held that Cruz could not be held liable therefor; hence, her
dismissal was illegal.
 Further, the LA held that petitioner Manese was not entitled to
her money claims, particularly unpaid salary, sick leave for the period
from May 16-31, 2001, cooperative savings, maternity benefit, mid-year
bonus and retirement pay. The LA took note of respondents' argument
alleging that such benefits due her were not given because of a car loan
given by the company which still has an outstanding balance. Even after
computing the amount due her vis-a-vis the car loan balance, shewould
still owe a balance of P14,262.76.Petitioners appealed the Decision of
the LA to the NLRC. Respondents filed an Opposition to Appeal on
October 10,2003. NLRC issued a Resolution dismissing the appeal and
affirming the LA’s Decisio in toto. However, the NLRC held that the Labor
Arbiter erred in ruling that petitioner Cruz was illegally dismissed as it
found that she committed the offenses enumerated in paragraphs 1.1 to
1.5 and paragraph 2 of the Memorandum sent to her. Nevertheless,
since respondents failed to interpose a timely appeal, the NLRC stated
that it was constrained to affirm the findings and award of separation pay
granted to petitioner Cruz by the Labor Arbiter.
 Petitioners' motion for reconsideration was denied by the NLRC.
Petitioners appealed the Resolutions of the NLRC to the Court of
Appeals (CA) via a petition for certiorari under Rule65 of the Rules of
Court. The CA rendered a Decision affirming the Resolutions of
the NLRC with modification. The CA found that (1) petitioner Cruz was
legally dismissed in accordance with Article 282, par. (c) of the Labor
Code; and (2) Jollibee is liable for the payment of petitioner Manese's
unpaid salary for the period of June 1-15, 2001, sick leave for the period
of May 16-31, 2001, and cooperative savings. Petitioners' motion for
reconsideration was denied by the CA. Hence, petitioners filed the
present petition.

Issue: Whether the CA exceeded its jurisdiction in dismissing petitioner

Cruz

Ruling:
 Failure to file a timely appeal by respondents caused the LA’s
ruling to become final and executory.
 In this case, respondents did not appeal from the decision of the
LA who ruled that the dismissal of petitioner Cruz was illegal.
 Respondents only filed an Opposition to Appeal, which prayed
for the reversal of the Labor Arbiter’s orders declaring as illegal the
dismissal of Cruz and directing payment of her separation pay. The
NLRC stated that respondents' opposition could have been treated as an
appeal, but it was filed only in October, way beyond the ten-day
reglementary period within which an appeal may be filed. Although the
NLRC found that Cruz was legally dismissed, it stated that it was
constrained to affirm the findings and award of separation pay granted to
Cruz by the Labor Arbiter, since respondents failed to interpose a timely
appeal. Hence, the NLRC affirmed the decision of the Labor Arbiter in
toto. In view of the foregoing, the Court holds that the Court of Appeals
exceeded its jurisdiction when it adjudged that petitioner Cruz was legally
dismissed.

Real vs Sangu Philippines January 19, 2011

Facts:
 Real was the manager Sangu Phils. Inc., which is engaged in
providing manpower for general services.
 Petitioner was dismissed from employment due to alleged gross
act of misconduct and for his participation in staging strike and
barricading the premises of the respondent company.
 The Labor Arbiter decided in favor of Real and ordered for his
reinstatement with full backwages.
 On appeal, the NLRC dismissed the case holding that Real is a
stockholder and corporate officer of the respondent company and
therefore it is an intra-corporate dispute over which the Labor Arbiter has
no jurisdiction.

Issue: Does the complaint constitutes an intra-corporate dispute and

thus beyond the jurisdiction of the Labor Arbiter?
Ruling:
 No. This case is not intra-corporate dispute but rather is a
termination dispute and, consequently falls under jurisdiction of the Labor
Arbiter pursuant to Section 217 of the Labor Code.
 The better policy to be followed in determining jurisdiction over a
case should be to consider concurrent factors such as status or
relationship of the parties or the nature of the question that is subject of
their controversy. In the absence of these factors RTC will not have
jurisdiction
 The case at bar is a termination dispute not an intra-corporate
dispute. Not all conflicts between the stockholders and the corporations
are classified as intra-corporate dispute. There are factors to consider in
determining whether the dispute involves corporate matters as to
consider them, intra-corporate controversies. The fact that Real is a
stockholder does not automatically classifies the case as intra-corporate
dispute, therefore Labor arbiter correctly assumed jurisdiction over
the case.
Locsin vs Nissan October 20, 2010

Facts:
 DOCTRINE: Given Locsin’s 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. A corporate
officers dismissal is always a corporate act, or an intra-corporate
controversy which arises between a stockholder and a corporation so
that RTC should exercise jurisdiction based on Section 5(c) of PD 902-A.
 Locsin was elected Executive Vice President and Treasurer
(EVP/Treasurer) of NCLPI. Locsin held this position for 13 years until he
was nominated and elected Chairman.
 A few months thereafter, an election was held and Locsin was
neither re-elected Chairman nor reinstated to his previous position as
EVP/Treasurer.
 Locsin filed a complaint for illegal dismissal before the Labor
Arbiter against NCLPI. NCLPI filed a Motion to Dismiss on the ground
that the Labor Arbiter did not have jurisdiction over the case since the
issue of Locsin’s removal as EVP/Treasurer involves an intra-corporate
dispute. Locsin maintained that he is an employee of NCPI.
 LA RULING: LA denied the Motion to Dismiss, holding that its
office-acquired jurisdiction to arbitrate and/or decide the instant complaint
finding extant in the case an employer-employee relationship. Article 280
of the Labor Code, the receipt of salaries by Locsin, SSS deductions on
that salary, and the element of control in the performance of work duties
were used by LA to conclude that Locsin was a regular employee.
 CA RULING: NCLPI elevated the case to the CA through a
Petition for Certiorari under Rule 65 of the Rules of Court. CA ruled that
Locsin was a corporate officer; hence the issue of his removal as
EVP/Treasurer is an intra-corporate dispute under the RTCs jurisdiction.
The fact that the position of EVP/Treasurer is specifically enumerated as
an office in the corporations by-laws makes him a corporate officer

Issue: Whether Locsin’s position as EVP/Treasurer makes him a

corporate officer thereby excluding him from the coverage of the Labor
Code?

Ruling:
 YES. 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. Section 25 of the
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 EVP/Treasurer, Locsin already acted as a corporate
officer because such position is provided for in Nissans By-Laws. An
office is created by the charter of the corporation and the officer is
elected by the directors or stockholders. On the other hand, an employee
usually occupies no office and generally is employed by the managing
officer of the corporation who also determines the compensation to be
paid to such employee.
 Locsin was elected by the NCLPI Board, in accordance with the
Amended By-Laws of the corporation. Given Locsin’s 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. A corporate officers dismissal is always a corporate act, or an
intra-corporate controversy which arises between a stockholder and a
corporation so that RTC should exercise jurisdiction based on Section
5(c) of PD 902-A

Pasos vs Philippine Construction July 3, 2013

Facts:
 Petitioner started working for respondent on April 26, 1996.
Based on the respondent's "Personnel Action Form Appointment for
Project Employment" dated April 30, 1996, petitioner was designated as
“Clerk II (Accounting)” and was assigned to the “NAIA – II Project.”
 It was likewise stated therein on April 26, 1996 to July 25, 1996.
Petitioner’s employment, however, did not end on July 25, 1996 but was
extended until August 4, 1998, or more than two years later.
 Based on respondent, petitioner was rehired as “Accounting
Clerk (Reliever)” and assigned to the “PCSO – Q.I. Project.”
 It was stated therein that his employment shall end on February
11, 1999 and may be terminated for cause or in accordance with the
provisions of Article 282 of the Labor Code, as amended.
 However, said employment did not actually end on February 11,
1999 but was extended until February 19, 1999 based on the “Personnel
Action Form-Project Employment”.
 On February 23, 1999, petitioner was again hired by respondent
as “Accounting Clerk” and was assigned to the “SM-Project”, it did not
specify the date when his employment will end but it was stated therein
that it will be “co-terminus with the completion of the project.”
 Said employment supposedly ended on August 19, 1999 per
“Personnel Action Form – Project Employment” dated August 18, 1999,
where it was stated, “[t]ermination of [petitioner’s] project employment
due to completion of assigned phase/stage of work or project effective at
the close of office hour[s] on 19 August 1999.”
 However, it appears that said employment was extended as
petitioner was again appointed as “Accounting Clerk” for “SM Project
(Package II).” It did not state a specific date up to when his extended
employment will be, but it provided that it will be “co-terminus with the
project.”
 It appears that such extension would eventually end on October
19, 2000. Despite the termination of his employment on October 19,
2000, petitioner claims that his superior instructed him to report for work
the following day, intimating to him that he will again be employed for the
succeeding SM projects.
 For purposes of reemployment, he then underwent a medical
examination which allegedly revealed that he had pneumonitis. Petitioner
was advised by respondent’s physician to take a 14-day sick leave.
 On November 27, 2000, after serving his sick leave, petitioner
claims that he was again referred for medical examination where it was
revealed that he contracted Koch’s disease.
 He was then required to take a 60-day leave of absence. The
following day, he submitted his application for sick leave but respondent’s
Project Personnel Officer told him that he was not entitled to sick leave
because he was not a regular employee.
 Petitioner still served a 60-day sick leave and underwent another
medical examination on February 16, 2001. He was then given a clean
bill of health and was given a medical clearance that he was fit to work.
 Petitioner claims that after he presented his medical clearance to
the Project Personnel Officer on even date, he was informed that his
services were already terminated on October 19, 2000 and he was
already replaced due to expiration of his contract.
 This prompted petitioner on February 18, 2003 to file a complaint
for illegal dismissal with a prayer for reinstatement and back wages.
 He argued that he is deemed a regular employee of respondent
due to his prolonged employment as a project employee as well as the
failure on the part of respondent to report his termination every time a
project is completed.
 He further contended that his termination without the benefit of
an administrative investigation was tantamount to an illegal dismissal.
 Respondent countered that petitioner was hired as a project
employee in several projects with specific dates of engagement and
termination and had full knowledge and consent that his appointment
was only for the duration of each project.
 It further contended that it had sufficiently complied with the
reportorial requirements to the DOLE, the Labor Arbiter rendered a
Decision in favor of petitioner.
 On appeal of the respondent, petitioner moved to dismiss
respondent’s appeal contending that the supersede as bond in the
amount of P422,630.41 filed by the latter was insufficient considering that
the Labor Arbiter’s monetary award is P460,292.41.
 He also argued that the person who verified the appeal, Mr.
Erece, Jr., Personnel Services Department Head of respondent, has no
authority to file the same for and in behalf of respondent.

Issue:
 Should an appeal be dismissed outright if the appeal bond filed
is less than the adjudged amount?
 Is petitioner a regular employee and not a mere project
employee and thus can only be dismissed for cause?

Ruling:
(a) No. The perfection of an appeal within the reglementary period
and in the manner prescribed by law is jurisdictional, and noncompliance
with such legal requirement is fatal and effectively renders the judgment
final and executory. As provided in Article 223 of the Labor Code, as
amended, in case of a judgment involving a monetary award, an appeal
by the employer may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly accredited by
the Commission in the amount equivalent to the monetary award in the
judgment appealed from. However, not only in one case has the Court
relaxed this requirement in order to bring about the immediate and
appropriate resolution of cases on the merits. In Quiambao v. National
Labor Relations Commission, the Court allowed the relaxation of the
requirement when there is substantial compliance with the rule. Likewise,
in Ong v. Court of Appeals, the Court held that the bond requirement on
appeals may be relaxed when there is substantial compliance with the
Rules of Procedure of the NLRC or when the appellant shows willingness
to post a partial bond. The Court held that “[w]hile the bond requirement
on appeals involving monetary awards has been relaxed in certain
cases, this can only be done where there was substantial compliance of
the Rules or where the appellants, at the very least, exhibited willingness
to pay by posting a partial bond.” In the instant case, the Labor Arbiter in
his decision ordered respondent to pay petitioner back wages amounting
to P422,630.41 and separation pay of P37,662 or a total of P460,292.41.
When respondent filed an appeal bond amounting to P422,630.41 or at
least 90% of the adjudged amount, there is no question that this is
substantial compliance with the requirement that allows relaxation of the
rules.
(b) Regular employee. In the instant case, the appointments issued
to petitioner indicated that he was hired for specific projects. The Court is
convinced however that although he started as a project employee, he
eventually became a regular employee of respondent. Under Article 280
of the Labor Code, as amended, a project employee is one whose
“employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of
the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration
of the season.” Thus, the principal test used to determine whether
employees are project employees is whether or not the employees were
assigned to carry out a specific project or undertaking, the duration or
scope of which was specified at the time the employees were engaged
for that project (Goma vs. Pamplona Plantation, Inc., G.R. No. 160905,
July 4, 2008 & Hanjin Heavy Industries and Construction Co., Ltd. Vs.
Ibanez, G.R. No. 170181, June 26, 2008). In the case at bar, petitioner
worked continuously for more than two years after the supposed three-
month duration of his project employment for the NAIA II Project. While
his appointment for said project allowed such extension since it
specifically provided that in case his “services are still needed beyond
the validity of [the] contract, the Company shall extend [his] services,”
there was no subsequent contract or appointment that specified a
particular duration for the extension. His services were just extended
indefinitely until “Personnel Action Form – Project Employment” dated
July 7, 1998 was issued to him which provided that his employment will
end a few weeks later or on August 4, 1998. While for first three months,
petitioner can be considered a project employee of respondent, his
employment thereafter, when his services were extended without any
specification of as to the duration, made him a regular employee of
respondent. And his status as a regular employee was not affected by
the fact that he was assigned to several other projects and there were
intervals in between said projects since he enjoys security of tenure.
Verily, failure of an employer to file termination reports after every project
completion proves that an employee is not a project employee. In this
case, records clearly show that respondent did not report the termination
of petitioner’s supposed project employment for the NAIA II Project to the
DOLE. Department Order No. 19, or the “Guidelines Governing the
Employment of Workers in the Construction Industry,” requires
employers to submit a report of an employee’s termination to the nearest
public employment office every time an employee’s employment is
terminated due to a completion of a project. Respondent submitted as
evidence of its compliance with the requirement supposed photocopies
of its termination reports, each listing petitioner as among the employees
affected. Unfortunately, none of the reports submitted pertain to the NAIA
II Project. Moreover, DOLE NCR verified that petitioner is not included in
the list of affected workers based on the termination reports filed by
respondent on August 11, 17, 20 and 24, 1998 for petitioner’s supposed
dismissal from the NAIA II Project effective August 4, 1998. This
certification from DOLE was not refuted by respondent. In Tomas Lao
Construction v. NLRC, the Court emphasized the indispensability of the
reportorial requirement: “Moreover, if private respondents were indeed
employed as “project employees,” petitioners should have submitted a
report of termination to the nearest public employment office every time
their employment was terminated due to completion of each construction
project. The records show that they did not. Policy Instruction No. 20 is
explicit that employers of project employees are exempted from the
clearance requirement but not from the submission of termination report.
We have consistently held that failure of the employer to file termination
reports after every project completion proves that the employees are not
project employees. Nowhere in the New Labor Code is it provided that
the reportorial requirement is dispensed with. The fact is that Department
Order No. 19 superseding Policy Instruction No. 20 expressly provides
that the report of termination is one of the indicators of project
employment.” Finally, petitioner’s regular employment was terminated by
respondent due to contract expiration or project completion, which are
both not among the just or authorized causes provided in the Labor
Code, as amended, for dismissing a regular employee. Thus, petitioner
was illegally dismissed. Article 279 of the Labor Code, as amended,
provides that an illegally dismissed employee is entitled to reinstatement,
full back wages, inclusive of allowances, and to his other benefits or their
monetary equivalent from the time his compensation was withheld from
him up to the time of his actual reinstatement. The Court agrees with
petitioner that there was no basis for the Labor Arbiter’s finding of
strained relations and order of separation pay in lieu of reinstatement.
This was neither alleged nor proved. Moreover, it has long been settled
that the doctrine of strained relations should be strictly applied so as not
to deprive an illegally dismissed employee of his right to reinstatement

Sorreda vs Cambridge Electronics February 11, 2010

Facts:
 On May 8, 1999, petitioner RONILO SORREDA was hired by
respondent as a technician for a period of 5 months at minimum wage.
 Five weeks into the job, petitioner met an accident in which his
left arm was crushed by a machine and had to be amputated.
 Petitioner claimed that, shortly after his release from the hospital,
officers of respondent company called him to a meeting with his
common-law wife, father and cousin. There he was assured a place in
the company as a regular employee for as long as the company existed
and as soon as he fully recovered from his injury.
 In September 1999, after he recovered from his injury, petitioner
reported for work. Instead of giving him employment, they made him sign
a memorandum of resignation to formalize his separation from the
company in the light of the expiration of his five-month contract.
 petitioner filed in the NLRC of Dasmarias, Cavite a complaint for
illegal dismissal
 He claimed that respondent failed to comply with the terms of the
contract of perpetual employment which was perfected in June 1999
when he was called to a meeting by management.
 Respondent denied that it extended regular employment to
petitioner.
 Only words of encouragement were offered but not perpetual
employment. Moreover, it assailed the labor arbiters jurisdiction over the
case, claiming a lack of causal connection between the alleged breach of
contract and their employer-employee relationship.
 The labor arbiter held that he had jurisdiction to hear and decide
the case as it involved the employer-employee relationship of the
contending parties.
 The NLRC agreed with respondent. It found that petitioner was
not a regular employee; thus, he was neither illegally dismissed nor
entitled to reinstatement and backwages.
 The CA dismissed the petition for lack of merit

Issue: Whether the labor arbiter had the jurisdiction to take cognizance
thereof

Ruling:
 No. While there was an employer-employee relationship
between the parties under their five-month per-project contract of
employment, the present dispute is neither rooted in the aforestated
contract nor is it one inherently linked to it. Petitioner insists on a right to
be employed again in respondent company and seeks a determination of
the existence of a new and separate contract that established that right.
As such, his case is within the jurisdiction not of the labor arbiter but of
the regular courts. The NLRC and the CA were therefore correct in ruling
that the labor arbiter erroneously took cognizance of the case.
 Even assuming arguendo that the labor arbiter had the
jurisdiction to decide the case, the Court cannot countenance petitioners
claim that a contract of perpetual employment was ever constituted.
While the Constitution recognizes the primacy of labor, it also recognizes
the critical role of private enterprise in nation-building and the
prerogatives of management. A contract of perpetual employment
deprives management of its prerogative to decide whom to hire, fire and
promote, and renders inutile the basic precepts of labor relations. While
management may validly waive it prerogatives, such waiver should not
be contrary to law, public order, public policy, morals or good customs.
[24] An absolute and unqualified employment for life in the mold of
petitioners concept of perpetual employment is contrary to public policy
and good customs, as it unjustly forbids the employer from terminating
the services of an employee despite the existence of a just or valid
cause. It likewise compels the employer to retain an employee despite
the attainment of the statutory retirement age, even if the employee has
become a non-performing asset or, worse, a liability to the employer.
 Moreover, aside from the self-serving claim of petitioner, there
was no concrete proof to establish the existence of such agreement.
Petitioner cannot validly force respondent to enter into a permanent
employment contract with him. Such stance is contrary to the
consensually principle of contracts as well as to the management
prerogative of respondent company to choose its employees.