ART.

217 - Jurisdiction of Labor Arbiter

1. PEOPLE'S BROADAST!"# SER$!E $. SE O% LABOR
%ATS&
This is a Petition for Certiorari under Rule 65questioning the Decision and Resolution of the Court of Appeals.
Private respondent JandeleonJuezan filed a complaint against petitioner ith the Department of !a"or and #mplo$ment
%D&!#' for illegal deduction( nonpa$ment of service incentive leave( )*th month pa$( premium pa$ for holida$ and rest da$
and illegal diminution of "enefits( dela$ed pa$ment of ages and noncoverage of +++( PA,-./., and Philhealth.
After the conduct of summar$ investigations( and after the parties su"mitted their position papers( the D&!# Regional
Director found that private respondent as an emplo$ee of petitioner( and as entitled to his mone$ claims.Petitioner
sought reconsideration of the Director0s &rder( "ut failed. The Acting D&!# +ecretar$ dismissed petitioner0s appeal on the
ground that petitioner su"mitted a Deed of Assignment of /an1 Deposit instead of posting a cash or suret$ "ond. 2hen the
matter as "rought "efore the CA( here petitioner claimed that it had "een denied due process( it as held that petitioner
as accorded due process as it had "een given the opportunit$ to "e heard( and that the D&!# +ecretar$ had 3urisdiction
over the matter( as the 3urisdictional limitation imposed "$ Article )45 of the !a"or Code on the poer of the D&!#
+ecretar$ under Art. )46%"' of the Code had "een repealed "$ Repu"lic Act 7o. %RA' 88*9.
Petitioner argues that the 7!RC %not the D&!# +ecretar$' has 3urisdiction over Juezan0s claim( in vie of Arts. 4)8 and
)46 of the !a"or Code. .t adds that the Court of Appeals committed grave a"use of discretion hen it dismissed their appeal
ithout delving on the issue of emplo$er-emplo$ee relationship.
!SS'E&
:a$ the D&!# ma1e a determination of hether or not an emplo$er-emplo$ee relationship e;ists( and if so( to hat e;tent<
R'L!"#&
=#+ "ut if the D&!# finds that there is no emplo$er-emplo$ee relationship( the 3urisdiction is properl$ ith the 7!RC.
7o limitation in the la as placed upon the poer of the D&!# to determine the e;istence of an emplo$er-emplo$ee
relationship. 7o procedure as laid don here the D&!# ould onl$ ma1e a preliminar$ finding( that the poer as
primaril$ held "$ the 7!RC. The la did not sa$ that the D&!# ould first see1 the 7!RC0s determination of the
e;istence of an emplo$er-emplo$ee relationship( or that should the e;istence of the emplo$er-emplo$ee relationship "e
disputed( the D&!# ould refer the matter to the 7!RC. The D&!# must have the poer to determine hether or not an
emplo$er-emplo$ee relationship e;ists( and from there to decide hether or not to issue compliance orders in accordance
ith Art. )46%"' of the !a"or Code( as amended "$ RA 88*9.
The determination of the e;istence of an emplo$er-emplo$ee relationship "$ the D&!# must "e respected. The e;panded
visitorial and enforcement poer of the D&!# granted "$ RA 88*9 ould "e rendered nugator$ if the alleged emplo$er
could( "$ the simple e;pedient of disputing the emplo$er- emplo$ee relationship( force the referral of the matter to the
7!RC. The Court issued the declaration that at least a prima facie shoing of the a"sence of an emplo$er-emplo$ee
relationship "e made to oust the D&!# of 3urisdiction. /ut it is precisel$ the D&!# that ill "e faced ith that evidence(
and it is the D&!# that ill eigh it( to see if the same does successfull$ refute the e;istence of an emplo$er-emplo$ee
relationship.
.f the D&!# ma1es a finding that there is an e;isting emplo$er-emplo$ee relationship( it ta1es cognizance of the matter( to
the e;clusion of the 7!RC. The D&!# ould have no 3urisdiction onl$ if the emplo$er-emplo$ee relationship has alread$
"een terminated( or it appears( upon revie( that no emplo$er- emplo$ee relationship e;isted in the first place.
The Court( in limiting the poer of the D&!#( gave the rationale that such limitation ould eliminate the prospect of
competing conclusions "eteen the D&!# and the 7!RC. The prospect of competing conclusions could 3ust as ell have
"een eliminated "$ according respect to the D&!# findings( to the e;clusion of the 7!RC( and this 2e "elieve is the more
prudent course of action to ta1e. .t must also "e remem"ered that the poer of the D&!# to determine the e;istence of an
emplo$er- emplo$ee relationship need not necessaril$ result in an affirmative finding. The D&!# ma$ ell ma1e the
determination that no emplo$er-emplo$ee relationship e;ists( thus divesting itself of 3urisdiction over the case. .t must not
"e precluded from "eing a"le to reach its on conclusions( not "$ the parties( and certainl$ not "$ this Court.
>nder Art. )46%"' of the !a"or Code( as amended "$ RA 88*9( the D&!# is full$ empoered to ma1e a determination as to
the e;istence of an emplo$er-emplo$ee relationship in the e;ercise of its visitorial and enforcement poer( su"3ect to
3udicial revie( not revie "$ the 7!RC.
To recapitulate( if a complaint is "rought "efore the D&!# to give effect to the la"or standards provisions of the !a"or Code
or other la"or legislation( and there is a finding "$ the D&!# that there is an e;isting emplo$er-emplo$ee relationship( the
D&!# e;ercises 3urisdiction to the e;clusion of the 7!RC. .f the D&!# finds that there is no emplo$er-emplo$ee
relationship( the 3urisdiction is properl$ ith the 7!RC. .f a complaint is filed ith the D&!#( and it is accompanied "$ a
claim for reinstatement( the 3urisdiction is properl$ ith the !a"or Ar"iter( under Art. 4)8%*' of the !a"or Code( hich
provides that the !a"or Ar"iter has original and e;clusive 3urisdiction over those cases involving ages( rates of pa$( hours
of or1( and other terms and conditions of emplo$ment( if accompanied "$ a claim for reinstatement. .f a complaint is filed
ith the 7!RC( and there is still an e;isting emplo$er-emplo$ee relationship( the 3urisdiction is properl$ ith the D&!#.
The findings of the D&!#( hoever( ma$ still "e questioned through a petition for certiorari under Rule 65 of the Rules of
Court.
.n the present case( the finding of the D&!# Regional Director that there as an emplo$er-emplo$ee relationship has "een
su"3ected to revie "$ this Court( ith the finding "eing that there as no emplo$er- emplo$ee relationship "eteen
petitioner and private respondent( "ased on the evidence presented. Private respondent presented self-serving allegations as
ell as self-defeating evidence.The findings of the Regional Director ere not "ased on su"stantial evidence( and private
respondent failed to prove the e;istence of an emplo$er-emplo$ee relationship. The D&!# had no 3urisdiction over the case(
as there as no emplo$er- emplo$ee relationship present. Thus( the dismissal of the complaint against petitioner is proper.
2.E(-BATAA" $ETERA"S SE'R!T) A#E") $. SE LA#'ES*A
%ATS&
This is a petition for revie ith pra$er for the issuance of a temporar$ restraining order or rit of preliminar$ in3unction of
the Decision and the of the Court of Appeals affirming the order of the +ecretar$ of !a"or.
#;-/ataan ?eterans +ecurit$ Agenc$( .nc. %#/?+A.' is in the "usiness of providing securit$ services hile private
respondents are #/?+A.@s emplo$ees assigned to the 7ational Poer Corporation at Am"u1lao A$dro #lectric Plant. &n 49
Be"ruar$ )556( private respondents led "$ Ale;ander Pocding %Pocding' instituted a complaint for underpa$ment of ages
against #/?+A. "efore the Regional &ffice of the D&!#. The Regional &ffice conducted a complaint inspection at the
Am"u1lao Plant here the folloing violations ere notedC %)' non- presentation of recordsD %4' non-pa$ment of holida$
pa$D %*' non-pa$ment of rest da$ premiumD %E' underpa$ment of night shift differential pa$D %5' non-pa$ment of service
incentive leaveD %6' underpa$ment of )*th month pa$D %8' no registrationD %6' no annual medical reportD %5' no annual or1
accidental reportD %)9' no safet$ committeeD and %))' no trained first aider. &n the same date( the Regional &ffice issued a
notice of hearing requiring #/?+A. and private respondents to attend the hearings. The Director of the Regional &ffice
issued an &rder to pa$ the computed deficiencies oing to the affected emplo$ees( otherise( a 2rit of #;ecution shall "e
issued to enforce compliance of this &rder. #/?+A. filed a motion for reconsideration and alleged that the Regional
Director does not have 3urisdiction over the su"3ect matter of the case "ecause the mone$ claim of each private respondent
e;ceeded P5(999. #/?+A. pointed out that the Regional Director should have endorsed the case to the !a"or Ar"iter. The
Regional Director denied #/?+A.@s motion for reconsideration pursuant to RA 88*9()) the limitations under Articles )45
and 4)8%6'of the !a"or Code no longer appl$ to the +ecretar$ of !a"or@s visitorial and enforcement poers under Article
)46%"'. The +ecretar$ of !a"or or his dul$ authorized representatives are no empoered to hear and decide( in a summar$
proceeding( an$ matter involving the recover$ of an$ amount of ages and other monetar$ claims arising out of emplo$er-
emplo$ee relations at the time of the inspection. #/?+A. appealed to the +ecretar$ of !a"or hich affirmed ith
modification the Regional Director@s &rder. #/?+A. filed a petition for certiorari "efore the CA dismissing the petition and
affirmed the +ecretar$ of !a"or@s decision.
!SS'E&
2hether or not +ecretar$ of !a"or or his dul$ authorized representatives have 3urisdiction over the mone$ claims of private
respondents hich e;ceed P5(999.
+ELD&
=es. .n Allied .nvestigation /ureau( .nc. v. +ec. of !a"or( Fhile it is true that under Articles )45 and 4)8 of the !a"or
Code( the !a"or Ar"iter has 3urisdiction to hear and decide cases here the aggregate mone$ claims of each emplo$ee
e;ceeds P5(999.99( said provisions of la do not contemplate nor cover the visitorial and enforcement poers of the
+ecretar$ of !a"or or his dul$ authorized representatives.G As set forth in Article )46%"' of the !a"or Code(
F%"'7otithstanding the provisions of ArticleHsI )45 and 4)8 of this Code to the contrar$( and in cases here the
relationship of emplo$er-emplo$ee still e;ists( the +ecretar$ of !a"or and #mplo$ment or his dul$ authorized
representatives shall have the poer to issue compliance orders to give effect to Hthe la"or standards provisions of this Code
and otherI la"or legislation "ased on the findings of la"or emplo$ment and enforcement officers or industrial safet$
engineers made in the course of inspection. The +ecretar$ or his dul$ authorized representatives shall issue rits of
e;ecution to the appropriate authorit$ for the enforcement of their orders( e;cept in cases here the emplo$er contests the
findings of the la"or emplo$ment and enforcement officer and raises issues supported "$ documentar$ proofs hich ere
not considered in the course of inspection.G
Aoever( if the la"or standards case is covered "$ the e;ception clause in Article )46%"' of the !a"or Code( then the
Regional Director ill have to endorse the case to the appropriate Ar"itration /ranch of the 7!RC. .n order to divest the
Regional Director or his representatives of 3urisdiction( the folloing elements must "e presentC %a' that the emplo$er
contests the findings of the la"or regulations officer and raises issues thereonD %"' that in order to resolve such issues( there
is a need to e;amine evidentiar$ mattersD and %c' that such matters are not verifia"le in the normal course of inspection. The
rules also provide that the emplo$er shall raise such o"3ections during the hearing of the case or at an$ time after receipt of
the notice of inspection results. .n this case( the Regional Director validl$ assumed 3urisdiction over the mone$ claims of
private respondents even if the claims e;ceeded P5(999 "ecause such 3urisdiction as e;ercised in accordance ith Article
)46%"' of the !a"or Code and the case does not fall under the e;ception clause.
,. LOS!" $S. "!SSA" P+!L!PP!"ES
%ATS&
&n Januar$ )( )554( !ocsin as elected #;ecutive ?ice President and Treasurer %#?PJTreasurer' of 7C!P.. As
#?PJTreasurer( his duties and responsi"ilities includedC %)' the management of the finances of the compan$D %4' carr$ing
out the directions of the President andJor the /oard of Directors regarding financial managementD and %*' the preparation of
financial reports to advise the officers and directors of the financial condition of 7C!P.. !ocsin held this position for )*
$ears. .n 4995( he as elected Chairman of 7C!P.0s /oard of Directors. +even months after his election as Chairman of the
/oard( the 7C!P. agreed to have a ne set of officers. >nfortunatel$( !ocsin as neither re-elected Chairman nor
reinstated to his previous position as #?PJTreasurer. !ocsin filed a complaint for illegal dismissal ith pra$er for
reinstatement( pa$ment of "ac1 ages( damages and attorne$0s fees "efore the !a"or Ar"iter against 7C!P. and /anson(
ho as then President of 7C!P..
7C!P. and /anson filed a :otion to Dismiss( on the ground that the !a"or Ar"iter did not have 3urisdiction over the case
since the issue of !ocsin0s removal as #?PJTreasurer involves an intra-corporate dispute. !ocsin su"mitted his opposition to
the motion to dismiss( maintaining his position that he is an emplo$ee of 7C!P.. !a"or Ar"iter Concepcion issued an &rder
den$ing the :otion to Dismiss( holding that her office acquired F3urisdiction to ar"itrate andJor decide the instant complaint
finding e;tant in the case an emplo$er- emplo$ee relationship.G 7C!P. appealed to the CA through a Petition for Certiorari.
The issue presented as hether or not !a"or Ar"iter committed grave a"use of discretion "$ den$ing the :otion to
Dismiss and holding that her office had 3urisdiction over the dispute. According to CA( !ocsin as a corporate officer and
the dispute as an intra-corporate one. CA concluded that !ocsin does not have an$ recourse ith the !a"or Ar"iter or the
7!RC since the removal of a corporate officer( hether elected or appointed( is an intra- corporate controvers$ over hich
the 7!RC has no 3urisdiction.
!SS'E&
2hether or not the CA has original 3urisdiction to revie decision of the !a"or Ar"iter under Rule 65.
+ELD&
Petition has no merit. +upreme Court agrees ith !ocsin0s su"mission that the 7C!P. incorrectl$ elevated the !a"or
Ar"iter0s denial of the :otion to Dismiss to the CA. !ocsin is correct in positing that the denial of a motion to dismiss is
unappeala"le. As a general rule( an aggrieved part$0s proper recourse to the denial is to file his position paper( interpose the
grounds relied upon in the motion to dismiss "efore the la"or ar"iter( and activel$ participate in the proceedings. Thereafter(
the la"or ar"iter0s decision can "e appealed to the 7!RC( not to the CA. The denial "$ the la"or ar"iter of the motion to
dismiss is not appeala"le "ecause the denial is merel$ an interlocutor$ order. The remed$ of the aggrieved part$ in case of
denial of the motion to dismiss is to file an anser and interpose( as a defense or defenses( the ground or grounds relied
upon in the motion to dismiss( proceed to trial and( in case of adverse 3udgment( to elevate the entire case "$ appeal in due
course. .n order to avail of the e;traordinar$ rit of certiorari( it is incum"ent upon petitioner to esta"lish that the denial of
the motion to dismiss as tainted ith grave a"use of discretion.
.n the la"or la setting( a plain( speed$ and adequate remed$ is still open to the aggrieved part$ hen a la"or ar"iter denies
a motion to dismiss. This is Article 44* of Presidential Decree 7o. EE4( as amended %!a"or Code'( hich statesC Decisions(
aards( or orders of the !a"or Ar"iter are final and e;ecutor$ unless appealed to the Commission "$ an$ or "oth parties
ithin ten %)9' calendar da$s from receipt of such decisions( aards( or orders. +uch appeal ma$ "e entertained if there is
prima facie evidence of a"use of discretion on the part of the !a"or Ar"iter. the 7!RC is clothed ith sufficient authorit$ to
correct an$ claimed Ferroneous assumption of 3urisdictionG "$ la"or ar"iters. +ince the legislature had clothed the 7!RC
ith the appellate authorit$ to correct a claimed Ferroneous assumption of 3urisdictionG on the part of the la"or ar"iter K a
case of grave a"use of discretion - the remed$ availed of "$ petitioner in this case is patentl$ erroneous as recourse in this
case is lodged( under the la( ith the 7!RC.
CA clearl$ erred in the application of the procedural rules "$ disregarding the relevant provisions of the 7!RC Rules( as
ell as the requirements for a petition for certiorari under the Rules of Court. To reiterate( the proper action of an aggrieved
part$ faced ith the la"or ar"iter0s denial of his motion to dismiss is to su"mit his position paper and raise therein the
supposed lac1 of 3urisdiction. The aggrieved part$ cannot immediatel$ appeal the denial since it is an interlocutor$ orderD
the appropriate remedial recourse is the procedure outlined in Article 44* of the !a"or Code( not a petition for certiorari
under Rule 65. ----------------------------------------------------
+C holds that e;ceptional circumstances e;ist in the present case to merit the rela;ation of the applica"le rules of procedure.
A strict implementation of the 7!RC Rules and the Rules of Court ould cause in3ustice to the parties "ecause the !a"or
Ar"iter clearl$ has no 3urisdiction over the present intra-corporate dispute. Due to e;isting e;ceptional circumstances( the
ruling on the merits that !ocsin is an officer and not an emplo$ee of 7issan must ta1e precedence over procedural
considerations. CA correctl$ ruled that no emplo$er-emplo$ee relationship e;ists "eteen !ocsin and 7issan..n this case(
!ocsin aselected"$ the 7C!P. /oard( in accordance ith the Amended /$-!as of the corporation( as such( he as a
corporate officer( not an emplo$ee. PD 594-A( hich defines corporate officers as Fthose officers of a corporation ho are
given that character either "$ the Corporation Code or "$ the corporation0s "$-las.G +ection 45 of Corporation Code
provides that corporate officers are the president( secretar$( treasurerand such other officers as ma$ "e provided for in the
"$-las. RTC has the 3urisdiction over the case. CA0s decision is affirmed and petitioner0s petition is dismissed.
-.RE)ES $S. RT *A.AT! BRA"+ -2
%ATS&
Lenith .nsurance Corp. and Rodrigo Re$es filed a derivative suit against his "rother &scar to o"tain an accounting of the
funds and assets of the famil$ corporation that ere ar"itraril$ and fraudulentl$ appropriated "$ &scar for himself. 2hen
Repu"lic Act %R.A.' 7o. 6855H8I too1 effect( the +#C0s e;clusive and original 3urisdiction over cases enumerated in +ection
5 of Presidential Decree %P.D.' 7o. 594-A as transferred to the RTC designated as a special commercial court. &scar
moved to declare the complaint as a nuisance and harassment suit and should "e dismissed according to the .nterim Rules of
Procedure for .ntra-Corporate ControversiesD and that it is not a "ona fide derivative suit as it parta1es of the nature of a
petition for the settlement of estate of the deceased Anastacia that is outside the 3urisdiction of a special commercial court.
!SS'E&
2hether the trial court( sitting as a special commercial court( has 3urisdiction over the su"3ect matter of Rodrigo0s
complaint.
+ELD&
To resolve it( e rel$ on the 3udicial principle that F3urisdiction over the su"3ect matter of a case is conferred "$ la and is
determined "$ the allegations of the complaint( irrespective of hether the plaintiff is entitled to all or some of the claims
asserted therein.G
2hile the complaint contained allegations of fraud purportedl$ committed "$ &scar( these allegations are not particular
enough to "ring the controvers$ ithin the special commercial court@s 3urisdictionD the$ are not statements of ultimate facts(
"ut are mere conclusions of laC ho and h$ the alleged appropriation of shares can "e characterized as Millegal and
fraudulentM ere not e;plained nor ela"orated on.
Allegations of deceit( machination( false pretenses( misrepresentation( and threats are largel$ conclusions of la that(
ithout supporting statements of the facts to hich the allegations of fraud refer( do not sufficientl$ state an effective cause
of action.
/.O.OL $S. SL!**ERS 0ORLD
%ATS&
This is a petition for revie on certiorari assailing the decision of the CA in CA-,.R. +P 7o. 6565*( hich set aside the
resolutions of the 7!RC.
Respondent +limmers 2orld .nternational operating under the name /ehavior :odifications( .nc. emplo$ed petitioner
!eslie &1ol as a management trainee ho rose up the ran1s to "ecome Aead &ffice :anager and then Director and ?ice
President. &1ol as suspended and su"sequentl$ fired after recieving notice( investigated and alloed a ritten e;planation
%hich +limmers 2orld found Funsatisfactor$G' in connection ith the seizure of the /ureau of Customs of seven Precor
elliptical machines and seven Precor treadmills "elonging to or consigned to +limmers 2orld. The shipment of the
equipment as placed under the names of &1ol and to customs "ro1ers for a value less than >+N599.
&1ol filed a complaint ith the Ar"itration "ranch of the 7!RC against respondents for illegal suspension( illegal dismissal(
unpaid commissions( damages and attorne$0s fees( ith pra$er for reinstatement and pa$ment of "ac1ages.
Respondents asserted that the 7!RC had no 3urisdiction over the su"3ect matter of the complaint.
!a"or Ar"iter granted the motion to dismiss. The la"or ar"iter ruled that &1ol as the vice-president of +limmers 2orld at
the time of her dismissal. +ince it involved a corporate officer( the dispute as an intra- corporate controvers$ falling
outside the 3urisdiction of the Ar"itration "ranch the 7!RC reversed and set aside the la"or ar"iter0s order upon appeal "$
the petitioner and ordered reinstatement ith "ac1ages and indemnit$. The CA set aside the 7!RC0s Resolution dated 45
:a$ 499) and affirmed the la"or ar"iter0s &rder dated 49 :arch 4999. The Court of Appeals ruled that the case( "eing an
intra-corporate dispute( falls ithin the 3urisdiction of the regular courts pursuant to Repu"lic Act 7o. 6855.The appellate
court added that the 7!RC had acted ithout 3urisdiction in giving due course to the complaint and deprived respondents of
their right to due process in deciding the case on the merits.
!SS'E &
2&7 petitioner as an emplo$ee of +limmers 2orld and 2&7 the 7!RC has 3urisdiction over the illegal dismissal case
filed "$ petitioner.
+ELD&
7o to "oth. The petition has no merit
&1ol as a C&RP&RAT# &BB.C#R at the time of her dismissal. According to the Amended /$-!as of +limmers 2orld
hich enumerate the poer of the "oard of directors as ell as the officers of the corporation( The general management of
the corporation shall "e vested in a "oard of five directors ho shall "e stoc1holders and ho shall "e elected annuall$ "$
the stoc1holders and ho shall serve until the election and qualification of their successors and !i1e the Chairman of the
/oard and the President( the ?ice President shall "e elected "$ the /oard of Directors from its on mem"ers. The ?ice
President shall "e vested ith all the poers and authorit$ and is required to perform all the duties of the President during
the a"sence of the latter for an$ cause. The ?ice President ill perform such duties as the /oard of Directors ma$ impose
upon him from time to time. This clearl$ shos that &1ol as a director and officer of +limmers 2orld.
An office is created "$ the charter of the corporation and the officer is elected "$ the directors and stoc1holders. &n the
other hand( an emplo$ee usuall$ occupies no office and generall$ is emplo$ed not "$ action of the directors or stoc1holders
"ut "$ the managing officer of the corporation ho also determines the compensation to "e paid to such emplo$ee.
A corporate officer0s dismissal is ala$s a corporate act( or an intra-corporate controvers$ hich arises "eteen a
stoc1holder and a corporation. The question of remuneration involving a stoc1holder and officer( not a mere emplo$ee( is
not a simple la"or pro"lem "ut a matter that comes ithin the area of corporate affairs and management and is a corporate
controvers$ in contemplation of the Corporation Code. .t is a settled rule that 3urisdiction over the su"3ect matter is
conferred "$ la. The determination of the rights of a director and corporate officer dismissed from his emplo$ment as ell
as the corresponding lia"ilit$ of a corporation( if an$( is an intra-corporate dispute su"3ect to the 3urisdiction of the regular
courts. Thus( the appellate court correctl$ ruled that it is not the 7!RC "ut the regular courts hich have 3urisdiction over
the present case. P#T.T.&7 D#7.#D.
6.RURAL BANK OF CORON vs. CORTES
%ATS&
Respondent as the Binancial Assistant( Personnel &fficer and Corporate +ecretar$ of The Rural /an1 of Coron. &n
e;amination of the financial "oo1s of the corporations it as found out that respondent as involved in several anomalies(
draing petitioners to terminate respondent0s services. Respondent0s counsel conve$ed respondent0s illingness to a"ide "$
the decision to terminate her "ut reminded them that she as entitled to separation pa$ as ell as to the other "enefits
provided "$ la in her favor. Aoever( this demand remained unheeded( so respondent filed a complaint for illegal
dismissal and non-pa$ment of salaries and other "enefits. Petitioners moved for the dismissal of the complaint on the
ground of lac1 of 3urisdiction( contending that the case as an intra-corporate controvers$ involving the removal of a
corporate officer( hence( cogniza"le "$ the +ecurities and #;change Commission %+#C' pursuant to +ection 5 of PD 594-A.
.t as denied and eventuall$( the !a"or Ar"iter found for respondent( computing the monetar$ aard due her. The !a"or
Ar"iter disposed his decision.
&n last da$ of the period of appeal( petitioners filed a 7otice of Appeal and :otion for Reduction of /ond to hich the$
attached a :emorandum on Appeal. .n their :otion for Reduction of /ond( petitioners alleged that the corporations ere
under financial distress and the Rural /an1 of Coron as under receivership. The$ thus pra$ed that the amount of "ond "e
su"stantiall$ reduced( prefera"l$ to one half thereof or even loer.
The 7!RC( hile noting that petitioners timel$ filed the appeal( held that the same as not accompanied "$ an appeal "ond(
a mandator$ requirement under Article 44* of the !a"or Code and +ection 6( Rule ?. of the 7!RC 7e Rules of
Procedure. .t accordingl$ dismissed the appeal.
Petitioners filed a Petition for Certiorari "efore the Court of Appeals( hich dismissed it. Aence this petition faulting the
appellate court for dismissing their petition( sa$ing that the$ did such "ased on mere technicalit$ and failure to decide "ased
on merit.
!SS'E&
). 2&7 the !a"or Ar"iter has thus 3urisdiction over respondent0s complaint.
). 2&7 the appellate court erred in dismissing the petition Mon a mere technicalit$.M
+ELD&
). =#+. 2hile( indeed( respondent as the Corporate +ecretar$ of the Rural /an1 of Coron( she as also its Binancial
Assistant and the Personnel &fficer of the to other petitioner corporations. :ainland Construction Co.( .nc. v.
:ovilla4* instructs that a corporation can engage its corporate officers to perform services under a circumstance
hich ould ma1e them emplo$ees.
4. 7&
The non-posting of an appeal "ond ithin the reglementar$ period divests the 7!RC of its 3urisdiction to entertain the
appeal. The requirement for posting the suret$ "ond is not merel$ procedural "ut 3urisdictional and cannot "e trifled ith.
7on-compliance ith such legal requirements is fatal and has the effect of rendering the 3udgment final and e;ecutor$. The
petitioners cannot "e alloed to see1 refuge in a li"eral application of rules for their act of negligence.
.n the case at "ar( petitioner did not post a full or partial appeal "ond ithin the prescri"ed period( thus( no appeal as
perfected from the decision of the !a"or Ar"iter. Bor this reason( the decision sought to "e appealed to the 7!RC had
"ecome final and e;ecutor$ and therefore immuta"le. Clearl$ then( the 7!RC has no authorit$ to entertain the appeal( much
less to reverse the decision of the !a"or Ar"iter.
8. Halguena vs. PAL
FACTS:
Petitioners ere emplo$ed as female flight attendants of respondent Philippine Airlines %PA!' on different dates prior to
7ovem"er 44( )556. The$ are mem"ers of the Blight Attendants and +teards Association of the Philippines %BA+AP'.
&n Jul$ ))( 499)( respondent and BA+AP entered into a Collective /argaining Agreement incorporating the terms and
conditions of their agreement for the $ears 4999 to 4995.
+ection )EE( Part A of the PA!-BA+AP C/A( provides thatC
A. Bor the Ca"in Attendants hired "efore 44 7ovem"er )556C
; ; ; ;
*. Compulsor$ Retirement
+u"3ect to the grooming standards provisions of this Agreement( compulsor$ retirement shall "e fift$-five %55' for females
and si;t$ %69' for males. ; ; ;.
.n a letter dated Jul$ 44( 499*( petitioners and several female ca"in cres manifested that the aforementioned C/A
provision on compulsor$ retirement is discriminator$( and demanded for an equal treatment ith their male counterparts.
&n Jul$ 45( 499E( petitioners filed a +pecial Civil Action for Declarator$ Relief ith Pra$er for the .ssuance of Temporar$
Restraining &rder and 2rit of Preliminar$ .n3unction ith the Regional Trial Court %RTC' of :a1ati Cit$( /ranch )E8(
doc1eted as Civil Case 7o. 9E-666( against respondent for the invalidit$ of +ection )EE( Part A of the PA!-BA+AP C/A.
The RTC set a hearing on petitioners@ application for a TR& and( thereafter( required the parties to su"mit their respective
memoranda.
RTC ruled that it had 3urisdiction over the controvers$ since such controvers$ did not arise from a la"or dispute rather it
arose from the unconstitutionalit$ of that certain provision in the C/A as ell as its violation of the !a"or Code and the
C#DA2.
CA ruled that RTC had 7& 3urisdiction over the case.
!SS'E&
2hether or not the RTC has 3urisdiction over the petitioners@ action challenging the legalit$ or constitutionalit$ of the
provisions on the compulsor$ retirement age contained in the C/A "eteen respondent PA! and BA+AP
+ELD&
.n the case at "ar( the allegations in the petition for declarator$ relief plainl$ sho 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. Here, the etitioners! rimar" relief in Ci#il Case $o. %4-&&' is the annulment of Section 144,
Part A of the PAL-FASAP CBA, which alle(edl" discriminates a(ainst them for )ein( female fli(ht attendants.
*he su)+ect of liti(ation is incaa)le of ecuniar" estimation, e,clusi#el" co(ni-a)le )" the .*C, ursuant to
Section 1/ 011 of Batas Pam)ansa Bl(. 12/, as amended. Bein( an ordinar" ci#il action, the same is )e"ond the
+urisdiction of la)or tri)unals.
*he said issue cannot )e resol#ed solel" )" al"in( the La)or Code. .ather, it re3uires the alication of the
Constitution, la)or statutes, law on contracts and the Con#ention on the 4limination of All Forms of
5iscrimination A(ainst 6omen, and the ower to al" and interret the constitution and C45A6 is within the
+urisdiction of trial courts, a court of (eneral +urisdiction.
*he +urisdiction of la)or ar)iters and the $L.C under Article 217 of the La)or Code is limited to disutes arisin(
from an emlo"er-emlo"ee relationshi which can onl" )e resol#ed )" reference to the La)or Code, other la)or
statutes, or their collecti#e )ar(ainin( a(reement.
Here, the emlo"er-emlo"ee relationshi )etween the arties is merel" incidental and the cause of action
ultimatel" arose from different sources of o)li(ation, i.e., the Constitution and C45A6.
*hus, where the rincial relief sou(ht is to )e resol#ed not )" reference to the La)or Code or other la)or
relations statute or a collecti#e )ar(ainin( a(reement )ut )" the (eneral ci#il law, the +urisdiction o#er the disute
)elon(s to the re(ular courts of +ustice and not to the la)or ar)iter and the $L.C. In such situations, resolution of
the disute re3uires e,ertise, not in la)or mana(ement relations nor in wa(e structures and other terms and
conditions of emlo"ment, )ut rather in the alication of the (eneral ci#il law. Clearl", such claims fall outside
the area of cometence or e,ertise ordinaril" ascri)ed to la)or ar)iters and the $L.C and the rationale for
(rantin( +urisdiction o#er such claims to these a(encies disaears.
*he disute in the case at )ar is not )etween FASAP and resondent PAL, who ha#e )oth re#iousl" a(reed
uon the ro#ision on the comulsor" retirement of female fli(ht attendants as em)odied in the CBA. *he
disute is )etween resondent PAL and se#eral female fli(ht attendants who 3uestioned the ro#ision on
comulsor" retirement of female fli(ht attendants. *hus, referral to the (rie#ance machiner" and #oluntar"
ar)itration would not ser#e the interest of the etitioners.
1. SA"T!A#O $S. % S+ARP RE0
%ATS&
Petitioner had )een wor8in( as a seafarer for Smith Bell 9ana(ement, Inc. for a)out fi#e 0:1 "ears. ;n <
Fe)ruar" 1//&, etitioner si(ned a new contract of emlo"ment with resondent, with the duration of nine 0/1
months. He was assured of a monthl" salar" of =S>:1:.%%, o#ertime a" and other )enefits. *he followin( da"
or on 4 Fe)ruar" 1//&, the contract was aro#ed )" the Philiine ;#erseas 4mlo"ment Administration
0P;4A1. Petitioner was to )e delo"ed on )oard the ?9S@ Seasread? which was scheduled to lea#e the ort of
9anila for Canada on 1< Fe)ruar" 1//&. A wee8 )efore the scheduled date of dearture, Cat. Pacifico
Fernande-, resondent!s @ice President, sent a facsimile messa(e to the catain of ?9S@ Seasread,? that the
wife of Paul Santia(o as8ed not to send her hus)and to 9S@ Seasread an"more. And that some callers who
did not re#eal their identit" (a#e some feed)ac8s that Paul Santia(o this time if allowed to deart will +um shi
in Canada li8e his )rother Christoher Santia(o. And re3uested to send his relacement instead in order to
re#ent from )ein( enali-ed. ;n / Fe)ruar" 1//&, etitioner was thus told that he would not )e lea#in( for
Canada an"more, )ut he was reassured that he mi(ht )e considered for delo"ment at some future date.
Petitioner filed a comlaint for ille(al dismissal, dama(es, and attorne"!s fees a(ainst resondent and its forei(n
rincial, Ca)le and 6ireless 09arine1 Ltd.
*he case was raffled to La)or Ar)iter *eresita Castillon- Lora, who ruled that the emlo"ment contract remained
#alid )ut had not commenced since etitioner was not delo"ed. Accordin( to her, resondent #iolated the rules
and re(ulations (o#ernin( o#erseas emlo"ment when it did not delo" etitioner, causin( etitioner to suffer
actual dama(es. ;n aeal )" resondent, the $L.C ruled that there is no emlo"er-emlo"ee relationshi
)etween etitioner and resondent )ecause under the Standard *erms and Conditions Ao#ernin( the
4mlo"ment of Filiino Seafarers on Board ;cean Aoin( @essel, the emlo"ment contract shall commence
uon actual dearture of the seafarer from the airort or seaort at the oint of hire and with a P;4A-aro#ed
contract. In the a)sence of an emlo"er-emlo"ee relationshi )etween the arties, the claims for ille(al
dismissal, actual dama(es, and attorne"!s fees should )e dismissed.
;n the other hand, the $L.C found resondent!s decision not to delo" etitioner to )e a #alid e,ercise of its
mana(ement rero(ati#e affirmin( the decision with modification #acatin( the award of actual dama(es and
attorne"!s fees. Petitioner mo#ed for the reconsideration of the $L.C!s 5ecision )ut his motion was denied for
lac8 of merit.1% He ele#ated the case to the Court of Aeals throu(h a etition for certiorari which noted that
there is an am)i(uit" in the $L.C!s 5ecision when it affirmed with modification the la)or ar)iter!s 5ecision,
)ecause )" the #er" modification introduced )" the Commission 0#acatin( the award of actual dama(es and
attorne"!s fees1, there is nothin( more left in the la)or ar)iter!s 5ecision to affirm. Accordin( to the aellate
court, etitioner is not entitled to actual dama(es )ecause dama(es are not reco#era)le )" a wor8er who was
not delo"ed )" his a(enc" within the eriod rescri)ed in the P;4A .ules. It a(reed with the $L.C!s findin(
that etitioner!s non-delo"ment was a #alid e,ercise of resondent!s mana(ement rero(ati#e. It added that
since etitioner had not dearted from the Port of 9anila, no emlo"er-emlo"ee relationshi )etween the
arties arose and an" claim for dama(es a(ainst the so-called emlo"er could ha#e no le( to stand on.
Petitioner!s su)se3uent motion for reconsideration was denied.
!ssue&
2hether or not the CA committed a serious error of la hen it ignored H+Iection )9 of Repu"lic Act HR.A.I 7o. 69E4
otherise 1non as the :igrant 2or1er@s Act of )555 as ell as +ection 45 of the +tandard Terms and Conditions
,overning the #mplo$ment of Bilipino +eafarers &n-/oard &cean-,oing ?essels %hich is deemed incorporated under the
petitioner@s P&#A approved #mplo$ment Contract' that the claims or disputes of the &verseas Bilipino 2or1er "$ virtue of
a contract fall ithin the 3urisdiction of the !a"or Ar"iter of the 7!RC.
+e2d&
=es. There is no question that the parties entered into an emplo$ment contract here"$ petitioner as contracted "$
respondent to render services on "oard M:+? +easpreadM for the consideration of >+N5)5.99 per month for nine %5'
months( plus overtime pa$. Aoever( respondent failed to deplo$ petitioner from the port of :anila to Canada. Considering
that petitioner as not a"le to depart from the airport or seaport in the point of hire( the emplo$ment contract did not
commence( and no emplo$er-emplo$ee relationship as created "eteen the parties. Aoever( a distinction must "e made
"eteen the perfection of the emplo$ment contract and the commencement of the emplo$er-emplo$ee relationship. The
perfection of the contract( hich in this case coincided ith the date of e;ecution thereof( occurred hen petitioner and
respondent agreed on the o"3ect and the cause( as ell as the rest of the terms and conditions therein. The commencement of
the emplo$er-emplo$ee relationship( as earlier discussed( ould have ta1en place had petitioner "een actuall$ deplo$ed
from the point of hire. Thus( even "efore the start of an$ emplo$er- emplo$ee relationship( contemporaneous ith the
perfection of the emplo$ment contract as the "irth of certain rights and o"ligations( the "reach of hich ma$ give rise to a
cause of action against the erring part$. Thus( if the reverse had happened( that is the seafarer failed or refused to "e
deplo$ed as agreed upon( he ould "e lia"le for damages.
:oreover( respondent@s act of preventing petitioner from departing the port of :anila and "oarding M:+? +easpreadM
constitutes a "reach of contract( giving rise to petitioner@s cause of action. Respondent unilaterall$ and unreasona"l$ reneged
on its o"ligation to deplo$ petitioner and must therefore anser for the actual damages he suffered. The fact that the P&#A
Rules are silent as to the pa$ment of damages to the affected seafarer does not mean that the seafarer is precluded from
claiming the same. The P&#A Rules onl$ provide sanctions hich the P&#A can impose on erring agencies. .t does not
provide for damages and mone$ claims recovera"le "$ aggrieved emplo$ees "ecause it is not the P&#A( "ut the 7!RC(
hich has 3urisdiction over such matters. Despite the a"sence of an emplo$er-emplo$ee relationship "eteen petitioner and
respondent( the Court rules that the 7!RC has 3urisdiction over petitioner@s complaint. The 3urisdiction of la"or ar"iters is
not limited to claims arising from emplo$er-emplo$ee relationships. +ection )9 of R.A. 7o. 69E4 %:igrant 2or1ers Act'(
provides thatC
3. ATLAS %AR*S !". $S. "LR
%ATS&
Pri#ate resondent Baime ;. dela Pena was a #eterinar" aide of Atlas Farms and one of the se#eral emlo"ees
who were terminated in Bul" 1/&/. He was re-hired the same month. In 1//<, he was cau(ht urinatin( and
defecatin( on coman" remises 0not in the toilet1. He was as8ed to e,lain )ut failed to do so so he was (i#en
a notice of termination with monetar" )enefits and ac8nowled(ed receit of searation a".
At time of his termination, he was recei#in( Ph 1&% dail" wa(e or a#era(e monthl" salar" of Ph:,4%2.%%.
Co-resondent A)ion, a carenterCmason was alle(edl" in fault of clo((in( the fishond draina(e when he
imroerl" disosed of (rass and other waste materials into the ondDs draina(e s"stem resultin( to dama(es
worth se#eral hundred thousand esos. He was also terminated.
A)ion was rece#in( monthl" salar" of Ph 4,:%%.
Both of them were wor8in( se#en da"s a wee8, includin( holida"s, without o#ertime, holida", rest da" a" and
ser#ice incenti#e lea#es.
Both filed searate comlaints for ille(al dismissal. *he claimed that their termination was due to etiotionerDs
susicion that the" were the leaders in a lan to form a union.
LA dismissed )ecause the (rie#ance machiner" of the CBA had not "et )een e,hausted.
*he" a#ailed of the (rie#ance rocess )ut refied the case )efore the $L.C. 5issatisfied, )rou(ht if )efore the
CA )" wa" of certiorari re#iew. CA denied etiotion and affirmed $L.CDs decision.
!ssue&
1. 6hether or not the ri#ate resondentsD dismissal from wor8 ille(al
2. 6hether LA and the $L.C had +urisdiction to decide comlaints for ille(al dismissal
+e2d&
Ees and Ees
1. Since this is a 3uestion of fact, )urden of ro#in( the #alidit" of the dismissal falls uon the etitioner.
$L.C found that etitioner failed to su)stantiate its claim that )oth ri#ate resondents committed
certain acts that #iolated the coman" rules and re(ulations. *he" were not also (i#en an" hearin( to air
their side.
2. LA and NLRC had jurisdiction over the cases. Records show that private respondents sought
but without success the grievance procedure in their CBA. It is worht pointing out that
private respondents went to the NLRC only after LA disissed their case. !nder these
circustances they had to find another avenue for redress. "etitioner failed to show proof
that it too# steps to convene the grievance achinery after LA first disissed the and
directed the to avail of the grievance achinery in the CBA.
10. PERPETUAL HELP CREDIT COOPERATIE! INC. vs. FABURADA
%ATS&
&n Januar$ *( )559( /enedicto Ba"urada( +isinita ?ilar( .melda Tama$o and Aarold Catipa$( private respondents( filed a
complaint against the Perpetual Aelp Credit Cooperative( .nc. %PACC.'( petitioner( ith the Ar"itration /ranch( Department
of !a"or and #mplo$ment %D&!#'( Dumaguete Cit$( for illegal dismissal( premium pa$ on holida$s and rest da$s(
separation pa$( age differential( moral damages( and attorne$@s fees.
Borthith( petitioner PACC. filed a motion to dismiss the complaint on the ground that there is no emplo$er-emplo$ee
relationship "eteen them as private respondents are all mem"ers and co-oners of the cooperative. Burthermore( private
respondents have not e;hausted the remedies provided in the cooperative "$-las. PACC. also filed a supplemental motion
to dismiss alleging that RA 65*5( theCooperative Development Authorit$ !a( requires conciliation or mediation ithin the
cooperative "efore a resort to 3udicial proceeding.
The !a"or Ar"iter ruled in favor of the private respondents( holding that the case is impressed ithemplo$er-emplo$ee
relationship and that the las on cooperatives is su"servient to the !a"or Code. The 7!RC affirmed the !A@s decision.
!SS'E&
2hether or not there is an emplo$er-emplo$ee relationship "eteen the parties and that private respondents ere illegall$
dismissed
+ELD&
=#+D thus petition is D#7.#D( and the decision of respondent 7!RC is ABB.R:#D.
.n determining the e;istence of an emplo$er-emplo$ee relationship( the folloing elements are consideredC %) ' the selection
and engagement of the or1er or the poer to hireD %4' the poer to dismissD %*' the pa$ment of ages "$ hatever meansD
and %E' the poer to control the or1er@s conduct( ith the latter assuming primac$ in the overall consideration. 7o
particular form of proof is required to prove the e;istence of an emplo$er-emplo$ee relationship. An$ competent and
relevant evidence ma$ sho the relationship.
The a"ove elements are present here. Petitioner PACC.( through :r. #dil"erto !antaca( Jr.( its :anager( hired private
respondents to or1 for it. The$ or1ed regularl$ on regular or1ing hours( ere assigned specific duties( ere paid
regular ages and made to accomplish dail$ time records 3ust li1e an$ other regular emplo$ee. Ba"urada as a regular part-
time Computer programmerJ operator( hereas Tama$o( ?illar( and Catipa$ ere cler1s. The$ or1ed under the supervision
of the cooperative manager. /ut unfortunatel$( the$ ere dismissed.
The !a"or Code comprehends three 1inds of emplo$eesC Regular emplo$ees( Pro3ect emplo$ees( and Casual #mplo$ees.
There are 4 separate instances here"$ it can "e determined that an emplo$ment is regularC )' .f the particular activit$
performed "$ the emplo$ee is necessar$ or desira"le in the usual "usiness or trade of the emplo$er( and 4' .f the emplo$ee
has "een performing the 3o" for at least a $ear. Private respondents ere rendering services necessar$ to the da$-to-da$
operations of PACC.. This alone qualified them as regular emplo$ees. :oreover( all of them e;cept one or1ed ith
PACC. for more than ) $ear. As regular emplo$ees or or1ers( private respondents are entitled to securit$ of tenure. Thus(
their services ma$ "e terminated onl$ for a valid cause( ith o"servance of due process.
Petitioner contends that the la"or ar"iter has no 3urisdiction to ta1e cognizance of the complaint of private respondents
considering that the$ failed to su"mit their dispute to the grievance machiner$ as required "$ P.D. )85 %strengthening the
Cooperative :ovement' 6 and its implementing rules and regulations under !&. 4*. !i1eise( the Cooperative
Development Authorit$ did not issue a Certificate of 7on-Resolution pursuant to +ection 6 of the Cooperative Development
Authorit$ !a. The a"ove provisions appl$ to mem"ers( officers and directors of the cooperative involved in disputes
ithin a cooperative or "eteen cooperatives.
*here is no e#idence that ri#ate resondents are mem)ers of etitioner PHCCI and e#en if the" are, the disute
is a)out a"ment of wa(es, o#ertime a", rest da" and termination of emlo"ment. =nder Art. 217 of the La)or
Code, these disutes are within the ori(inal and e,clusi#e +urisdiction of the La)or Ar)iter.
11. A'STR!A $S. "LR
%ATS&
Pastor 5ionisio Austria was dismissed from ser#ice )" the Se#enth 5a" Ad#entist or S5A for misaroriation of
funds, wilful )reach of trust, serious misconduct, (ross and ha)itual ne(lect of duties and commission of an
offense a(ainst the erson of emlo"erDs dul" authori-ed reresentati#e as (rounds. Pastor Austria )e(an
ser#in( the reli(ious cororation on 1/'< until ;cto)er 1//1 when his ser#ices was terminated. From Au(ust u
to ;cto)er 1//1, etitioner recei#ed se#eral communications from 9r. I)esate the *reasurer of the $e(ros
9ission as8in( him to admit accounta)ilit" and resonsi)ilit" for the church tithes and offerin(s collected )" his
wife. He e,lained that it was I)esate and Pastor Buhat, the resident of the said 9ission who authori-ed his
wife to collect since he was sic8 at that time. ;n the other hand, Pastor Buhat and etitioner had a heated
ar(ument when Pastor .odri(o har)oured ill feelin(s a(ainst the latter for helin( out one 5ann" 5iamada for
collectin( the unaid )alance for the reair of .odri(oDs motor #ehicle. =on disco#er" that .odri(o was a)out to
file a comlaint a(ainst him with the 9ission, Austria went to BuhatDs office to con#ene the 4,ecuti#e Committee
)ut he failed since there was no 3uorum. Austria )an(ed the attacheF case of Buhat, scattered the )oo8s and
tried to o#erturn the ta)le. Su)se3uentl", on ;cto)er 2/, 1//1, the 4,ecuti#e Committee was con#ened and
rendered the dismissal of Austria.
The !A ruled in favour of the petitioner. 7!RC vacated such findings "ut reversed its on decision upon filing of the :R
"$ respondents on the ground that !A has no 3urisdiction due to the constitutional provision of the separation of church and
state since the case involved an ecclesiastical affair to hich the state cannot interfere.
!ssue&
). 2hether or not the !AJ7!RC has 3urisdiction over the case
4. 2hether or not the termination of the services of petitioner is an ecclesiastical affair and as such
*. involves the separation of church and stateD and
E. 2hether or not such termination is valid
+e2d&
). =es. The grounds for the petitioner0s dismissal are "ased on Art 464 of the !a"or Code hich
enumerates the 3ust causes for termination of emplo$ment. /$ this alone( it is palpa"le that the reason for his dismissal from
the service is not a religious nature. Coupled ith this is the act of the +DA in furnishing 7!RC ith a cop$ of petitioner0s
letter of termination recognizing his 46 $ears of service. As such( the +tate( through the !A and the 7!RC( has the right to
ta1e cognizance of the case and to determine hether +DA( as emplo$er( rightfull$ e;ercised its management prerogative to
dismiss an emplo$ee. This is in consonance ith the mandate of the Constitution to afford full protection to la"or.
Burthermore( the !a"or Code( under Art 486 on post emplo$ment states that Fthe provisions of this Title shall appl$ to all
esta"lishments or underta1ings( hether for profit or not.G The provision does not ma1e an$ e;ception in favour of religious
corporation. This is made more evident "$ the fact that the Rules .mplementing the !C( particularl$( +ection )( Rule )(
/oo1 ?. on the termination of #mplo$ment and Retirement( categoricall$ includes religious institutions in the coverage of
the la.
4. 7o. The principle of separation of church and state finds no application in this case. The rationale of the principle of such
separation is summed up in the familiar sa$ing( F+trong fence ma1e good neigh"ours.G The idea advocated "$ this principle
is to delineate the "oundaries "eteen the to institutions and thus( avoid encroachments "$ one against the other "ecause
of a misunderstanding of the limits of their respective e;clusive 3urisdictions. The case at "ar does not concern an
ecclesiastical or purel$ religious affair as to "ar the +tate from ta1ing cognizance of the same. #cclesiastical affair involves
the relationship "eteen the church and its mem"ers and relate to matters of faith( religious doctrines( orship and
governance of the congregation. 2hat is involved here is the relationship of the church as an emplo$er and the minister as
an emplo$ee. .t is purel$ secular and has no relation hatsoever ith the practice of faith( orship or doctrines of the
church.
*. 7o. .n order to have a valid dismissal( the concurrence of the to requirements namel$C %a' due processD and %"' valid
cause. The rules further require the emplo$er to furnish the emplo$ee ith to ritten notices( %a' a ritten notice served
on the emplo$ee specif$ing the ground or grounds for termination and giving the said emplo$ee reasona"le opportunit$
ithin hich to e;plain his sideD and %"' a ritten notice of termination served on the emplo$ee indicating that upon due
consideration of all circumstances( grounds have "een esta"lished to 3ustif$ his termination. 7on-compliance is fatal
"ecause the requirements are conditions sine qua non "efore dismissal ma$ validl$ "e effected.
PR su"stantiall$ failed to compl$ ith the a"ovementioned requirements as regards the first notice. The notice to attend the
meeting cannot "e construed as a ritten charge. The alleged grounds for the dismissal of petitioner from the service ere
onl$ revealed to him hen the actual letter of dismissal as finall$ issued. Burthermore( the Court did not sustain the
validit$ of the dismissal "ased on the grounds enumerated "$ the PR.
12. DEPART*E"T O% %ORE!#" A%%A!RS $S. "LR
%ATS&
A comlaint for ille(al dismissal was filed a(ainst the Asian 5e#eloment Ban8 0?A5B?1. =on receit of
summonses, )oth the A5B and the 5FA notified the LA that the A5B, as well as its President and ;fficers, were
co#ered )" an immunit" from le(al rocess e,cet for )orrowin(s, (uaranties or the sale of securities ursuant
to Article :%011 and Article :: of the A(reement 4sta)lishin( the Asian 5e#eloment Ban8 0the ?Charter?1 in
relation to +ection 5 and +ection EE of the Agreement /eteen The /an1 And The ,overnment &f The Philippines
Regarding The /an1@s Aeadquarters %the MAeadquarters AgreementM'. The !A too1 cognizance of the complaint on the
impression that the AD/ had aived its diplomatic immunit$ from suit( and issued a 3udgment in favor of the complainant.
The AD/ did not file an appeal( "ut the DBA sought a nullification ith the 7!RC. The latter denied the request.
!ssue&
). 2hether or not AD/ is immune from suit<
4. 2hether or not the DBA has the legal standing to file the present petition<
+e2d&
). =#+. >nder the Charter and Aeadquarters Agreement( the AD/ en3o$s immunit$ from legal process of ever$ form(
e;cept in the specified cases of "orroing and guarantee operations( as ell as the purchase( sale and underriting
of securities. The /an10s officers( on their part( en3o$ immunit$ in respect of all acts performed "$ them in their
official capacit$. The Charter and the Aeadquarters Agreement granting these immunities and privileges are treat$
covenants and commitments voluntaril$ assumed "$ the Philippine government hich must "e respected. /eing an
international organization that has "een e;tended a diplomatic status( the AD/ is independent of the municipal la.
&ne of the "asic immunities of an international organization is immunit$ from local 3urisdiction( i.e.( that it is
immune from the legal rits and processes issued "$ the tri"unals of the countr$ here it is found. The o"vious
reason for this is that the su"3ection of such an organization to the authorit$ of the local courts ould afford a
convenient medium thru hich the host government ma$ interfere in their operations or even influence or control
its policies and decisions of the organizationD "esides( such su"3ection to local 3urisdiction ould impair the
capacit$ of such "od$ to discharge its responsi"ilities impartiall$ on "ehalf of its mem"er-states.M The AD/ didn@t
descend to the level of an ordinar$ part$ to a commercial transaction( hich should have constituted a aiver of its
immunit$ from suit( "$ entering into service contracts ith different private companies. There are to conflicting
concepts of sovereign immunit$( each idel$ held and firml$ esta"lished. According to the classical or a"solute
theor$( a sovereign cannot( ithout its consent( "e made a respondent in the Courts of another sovereign. According
to the neer or restrictive theor$( the immunit$ of the sovereign is recognized onl$ ith regard to pu"lic acts or
acts 3ure imperii of a state( "ut not ith regard to private act or acts 3ure gestionis. Certainl$( the mere entering into
a contract "$ a foreign state ith a private part$ cannot "e the ultimate test. +uch an act can onl$ "e the start of the
inquir$. The logical question is hether the foreign state is engaged in the activit$ in the regular course of "usiness.
.f the foreign state is not engaged regularl$ in a "usiness or trade( the particular act or transaction must then "e
tested "$ its nature. .f the act is in pursuit of a sovereign activit$( or an incident thereof( then it is an act 3ure
imperii( especiall$ hen it is not underta1en for gain or profit. The service contracts referred to "$ private
respondent have not "een intended "$ the AD/ for profit or gain "ut are official acts over hich a aiver of
immunit$ ould not attach.
4. =es. The DBA@s function includes( among its other mandates( the determination of persons and institutions covered
"$ diplomatic immunities( a determination hich( hen challenged( entitles it to see1 relief from the court so as not
to seriousl$ impair the conduct of the countr$@s foreign relations. The DBA must "e alloed to plead its case
henever necessar$ or advisa"le to ena"le it to help 1eep the credi"ilit$ of the Philippine government "efore the
international communit$. 2hen international agreements are concluded( the parties thereto are deemed to have
li1eise accepted the responsi"ilit$ of seeing to it that their agreements are dul$ regarded. .n our countr$( this tas1
falls principall$ on the DBA as "eing the highest e;ecutive department ith the competence and authorit$ to so act
in this aspect of the international arena
1,. P"B 4s. ABA"SA#
%ATS&
.esondent Florence Ca)ansa( arri#ed in Sin(aore as a tourist. She alied for emlo"ment, with the
Sin(aore Branch of the Philiine $ational Ban8, a ri#ate )an8in( cororation or(ani-ed and e,istin( under
the laws of the Philiines, with rincial offices at the P$B Financial Center in 9anila. At the time, the Branch
;ffice had two 021 t"es of emlo"eesG 0a1 e,atriates or the re(ular emlo"ees, hired in 9anila and assi(ned
a)road includin( Sin(aore, and 0)1 locall" 0direct1 hired. She alied for emlo"ment as Branch Credit ;fficer.
She was hired 0aointed1 uon the recommendation of .u)en C. *o)ias a Aeneral 9ana(er of the P$B
Sin(aore )ranch. As re3uired, she o)tained an H4mlo"ee PassI for two "ears. Her aointment as a Credit
;fficer stated that she would under(o a ro)ation for a eriod of three months from the date of assumtion of
dut" that can )e terminated uon 1 da" notice and after ro)ation uon one month notice. *he Philiine
4m)ass" in Sin(aore rocessed the emlo"ment contract of resondent and then she was issued )" the
P;4A, an J;#erseas 4mlo"ment Certificate,D certif"in( that she was a )ona fide contract wor8er for Sin(aore.
/arel$ three %*' months in office respondent Ca"ansag( she su"mitted to To"ias( her initial performance report that the latter
as so impressed ith the it that he made a notation and( on said OReport0C O,&&D 2&RP.0 Aoever( later she as told
that she had to resign "ecause of Fcost cutting measureG. Perple;ed( she as1ed for a formal advice "ut she received none.
+he refused to resign. To"ias demanded that she su"mit her letter of resignation( ith the prete;t that he needed a Chinese-
spea1ing Credit &fficer to penetrate the local mar1et( ith the information that a Chinese-spea1ing Credit &fficer had
alread$ "een hired and ill "e reporting for or1 soon. +he as arned that( unless she su"mitted her letter of resignation(
her emplo$ment record ill "e "lemished ith the notation OD.+:.++#D0 spread thereon. +till respondent Ca"ansag
refused to resign( To"ias dismissed her 3ust a"out four months from hiring.
Respondent Ca"ansag filed a complaint of illegal dismissal "efore the ar"itration "ranch of the 7!RC in the 7ational
Capital Region. The petitioner contended that the !a"or Ar"iter has no 3urisdiction "ecause respondent as Mlocall$ hiredMD
and totall$ Mgoverned "$ and su"3ect to the las( common practices and customsM of +ingapore( not of the PhilippinesG.
!SS'E&
2hether or not the ar"itration "ranch of the 7!RC in the 7ational Capital Region has 3urisdiction over the instant
controvers$.
+ELD&
Ees. Based on Art. 127 and more secificall", Section 1% of .A &%421 and La)or ar)iters clearl" ha#e ori(inal
and e,clusi#e +urisdiction o#er claims arisin( from emlo"er-emlo"ee relations, includin( termination disutes
in#ol#in( all wor8ers, amon( whom are o#erseas Filiino wor8ers 0;F61. Prior to emlo"in( resondent,
etitioner had to o)tain an emlo"ment ass for her from the Sin(aore 9inistr" of 9anower. Securin( the
ass was a re(ulator" re3uirement ursuant to the immi(ration re(ulations of Sin(aore.
+imilarl$( the Philippine government requires non-Bilipinos or1ing in the countr$ to first o"tain a local or1 permit in
order to "e legall$ emplo$ed here. That permit( hoever( does not automaticall$ mean that the non- citizen is there"$ "ound
"$ local las onl$( as averred "$ petitioner. .t does not at all impl$ a aiver of one0s national las on la"or. A"sent an$
clear and convincing evidence to the contrar$( such permit simpl$ means that its holder has a legal status as a or1er in the
issuing countr$.
7oteorth$ is the fact that respondent li1eise applied for and secured an &verseas #mplo$ment Certificate from the
P&#A through the Philippine #m"ass$ in +ingapore. The Certificate issued declared her a "ona fide contract or1er for
+ingapore. >nder Philippine la( this document authorized her or1ing status in a foreign countr$ and entitled her to all
"enefits and processes under our statutes. Thus( even assuming arguendo that she as considered at the start of her
emplo$ment as a Mdirect hireM governed "$ and su"3ect to the las( common practices and customs prevailing in +ingapore
she su"sequentl$ "ecame a contract or1er or an &B2 ho as covered "$ Philippine la"or las and policies upon
certification "$ the P&#A. At the time her emplo$ment as illegall$ terminated( she alread$ possessed the P&#A
emplo$ment Certificate.
:oreover( petitioner admits that it is a Philippine corporation doing "usiness through a "ranch office in +ingapore.
+ignificantl$( respondent0s emplo$ment "$ the +ingapore "ranch office had to "e approved "$ the president of the "an1
hose principal offices ere in :anila. This circumstance militates against petitioner0s contention that respondent as
Mlocall$ hiredMD and totall$ Mgoverned "$ and su"3ect to the las( common practices and customsM of +ingapore( not of the
Philippines. .nstead( ith more reason does this fact reinforce the presumption that respondent falls under the legal
definition of migrant or1er( in this case one deplo$ed in +ingapore. Aence( petitioner cannot escape the application of
Philippine las or the 3urisdiction of the 7!RC and the la"or ar"iter.
%1ahit ang or1er a$ locall$ hired sa la"as ng Pilipinas( hindi automatic na hindi na si$a under ng "atas natin. Ang permit na
nerequire ng +ingapore 1a$ Ca"ansag a$ simpl$ compliance lang ng immigration regulations nila. Aindi to aiverQ
Counterpart to ng Art. E9 ng !C natin regarding a"out emplo$ment permit of non resident aliens under la"or standards. =ou
ma$ chec1Jrevie it "a1a magtanong%corelate' si mam dito'
1-. BA"E5 $S. $ALDE$!LLA
%ATS&
Petitioner as the sales operations manager of private respondent in its "ranch in .ligan Cit$. .n )55*( private respondent
Mindefinitel$ suspendedM petitioner and the latter filed a complaint for illegal dismissal ith the 7!RC in .ligan Cit$. !a"or
Ar"iter found petitioner to have "een illegall$ dismissed and ordered the pa$ment of separation pa$ in lieu of reinstatement(
and of "ac1ages and attorne$@s fees. The decision as appealed to the 7!RC( hich dismissed the same for having "een
filed out of time. #levated "$ petition for certiorari "efore the +upreme Court( the case as dismissed on technical groundsD
hoever( the Court also pointed out that even if all the procedural requirements for the filing of the petition ere met( it
ould still "e dismissed for failure to sho grave a"use of discretion on the part of the 7!RC.
Private respondent filed a complaint for damages "efore the Regional Trial Court of :isamis &riental on the ground that
petitioner in his modus operandi %unauthorized instalment sale scheme hich caused neglect in his dut$ as a saleman and
use of private respondent0s propert$ and supplies in conducting his on "usiness' hich resulted to private respondent0s
"usiness decrease in sales. Petitioner filed a motion to dismiss and interposed that the action for damages( having arisen
from an emplo$er-emplo$ee relationship( as squarel$ under the e;clusive original 3urisdiction of the 7!RC and is "arred
"$ reason of the final 3udgment in the la"or case. Ae accused private respondent of splitting causes of action( stating that the
latter could ver$ ell have included the instant claim for damages in its counterclaim "efore the !a"or Ar"iter. The RTC
declared itself as having 3urisdiction on the ground that the private respondent does not as1 relief under the !a"or Code of
the Philippnes. The private respondent see1s to recover damages as redress for defendant@s "reach of his contractual
o"ligation to plaintiff ho as damaged and pre3udiced.
!SS'E&
2hether or not the Regional trial court has 3urisdiction over the su"3ect matter.
+ELD&
7&. The 3urisdiction of !a"or Ar"iters and the 7!RC in Article 4)8 is comprehensive enough to include claims for all
forms of damages Marising from the emplo$er-emplo$ee relationsM.The designating clause Marising from the emplo$er-
emplo$ee relationsM Article 4)8 should appl$ ith equal force to the claim of an emplo$er for actual damages against its
dismissed emplo$ee( here the "asis for the claim arises from or is necessaril$ connected ith the fact of termination( and
should "e entered as a counterclaim in the illegal dismissal case.
#ven under Repu"lic Act 7o. 685 %the M.ndustrial Peace ActM( no completel$ superseded "$ the !a"or Code'(
3urisprudence as settled that here the plaintiff@s cause of action for damages arose out of( or as necessaril$ intertined
ith( an alleged unfair la"or practice committed "$ the union( the 3urisdiction is e;clusivel$ ith the %no defunct' Court of
.ndustrial Relations( and the assumption of 3urisdiction of regular courts over the same is a nullit$. To allo otherise
ould "e Mto sanction split 3urisdiction( hich is pre3udicial to the orderl$ administration of 3ustice.M
There is no mista1ing the fact that private respondent@s claim against petitioner for actual damages arose from a prior
emplo$er-emplo$ee relationship. .n the first place( private respondent ould not have ta1en issue ith petitioner@s Mdoing
"usiness of his onM had the latter not "een concurrentl$ its emplo$ee. Thus( the damages alleged in the complaint "elo
areC first( those amounting to lost profits and earnings due to petitioner@s a"andonment or neglect of his duties as sales
manager( having "een otherise preoccupied "$ his unauthorized installment sale schemeD and second( those equivalent to
the value of private respondent@s propert$ and supplies hich petitioner used in conducting his M"usiness M.
+econd( and more importantl$( to allo respondent court to proceed ith the instant action for damages ould "e to open
ane the factual issue of hether petitioner@s installment sale scheme resulted in "usiness losses and the dissipation of
private respondent@s propert$. This issue has "een dul$ raised and ruled upon in the illegal dismissal case and the !a"or
Ar"iter ruled that no "usiness loses ma$ "e attri"uted to the petitioner. .n other ords( the issue of actual damages has "een
settled in the la"or case( hich is no final and e;ecutor$.
The lama1ing authorit$ had second thoughts a"out depriving the !a"or Ar"iters and the 7!RC of the 3urisdiction to aard
damages in la"or cases "ecause that setup ould mean duplicit$ of suits( splitting the cause of action and possi"le
conflicting findings and conclusions "$ to tri"unals on one and the same claim.
%2alang 3urisdiction ang Regular courts sa damages na gusto ma1uha ng emplo$er against sa emplo$ee 1apag it arises from
the ee-er relationship. +a tingin 1o lang ha ang purpose ng Art.4)8 a"out damages 1ung "a1it malaa1 ito a$ dahil a"out sa
promptness ng resolution of la"or cases. +i$empre naman 1ung iaalo na iisplit ang suitC isa sa !a"or Ar"iter regarding
termination disputes at isa 1apag ma$ claim ng emplo$er against sa emplo$ee. :ala1i na ang tra"aho. Ang solution dito a$
counterclaim. .sang suit nalang at magfile nalang ang emplo$er ng counter claim. Ang advantage 1asi dito a$ para isahang
determination ng facts at para d narin madagdagan ang mga 1aso na na1atam"a1 sa regular courts. .compare natin ang case
na to sa Pepsi cola vs. ,allang( dun 1asi ang su"3ect matter dun a$ malicious prosecution 1a$a i"ang i"a tlga ang cause of
action. Dun ma$ 3urisdiction ang regular court'
1/. SA"TOS $S. SER$!ER P+!L!PP!"ES !".
%ATS&
/efore this Court is a Petition for Revie on Certiorari under Rule E5 of the Rules of Court( see1ing to set aside the Court
of Appeals.
Petitioner :a. .sa"el T. +antos as the Auman Resource :anager of respondent +ervier Philippines( .nc. she filed a
vacation leave( to go to france ith her famil$. The$ ate in a restaurant 1non for mussels. .t cause her an allerg$ reaction(
here she he fell into coma for 4) da$s. 2ith the doctor0s consent( she as alloed her to return to the Philippines to
continue medication. The compan$0s ph$sician conducted a ph$sical and ps$chological evaluation of her condition( to
determine her fitness to resume her or1 at the compan$. The ph$sician concluded that the former had not full$ recovered
mentall$ and ph$sicall$. Aence( respondent as constrained to terminate petitioner0s services.
The compan$ offered +antos offered a retirement pac1age hich consists ofC Retirement plan "enefit( insurance pension(
educational assistance and medical and health care. &f the promised retirement "enefits amounting to P)(96*(6E).86( onl$
P89)(E5E.65 as released to petitioner0s hus"and( the "alance thereof as ithheld allegedl$ for ta;ation purposes.
Petitioner( represented "$ her hus"and( instituted the instant case for unpaid salariesD unpaid separation pa$D unpaid "alance
of retirement pac1age plus interestD insurance pension for permanent disa"ilit$D educational assistance for her sonD medical
assistanceD reim"ursement of medical and reha"ilitation e;pensesD moral( e;emplar$( and actual damages( plus attorne$0s
fees.
!A dismiss the complaint( and The ar"iter refused to rule on the legalit$ of the deductions made "$ respondent from
petitioner0s total retirement "enefits for ta;ation purposes( as the issue as "e$ond the 3urisdiction of the 7!RC 7!RC(
alloed santos to recover the promise pac1age of "enefit. CA affirmed 7!RC. Thus this petition.
!SS'E&
2&7 the !A and 7!RC has the 3urisdiction to rule on the legalit$ of deduction allegedl$ deducted for ta;ation purposes.
+ELD&
=es( petitioner0s claim for illegal deduction falls ithin the tri"unal0s 3urisdiction. .t is noteorth$ that petitioner demanded
the completion of her retirement "enefits( including the amount ithheld "$ respondent for ta;ation purposes. The issue of
deduction for ta; purposes is intertined ith the main issue of hether or not petitioner0s "enefits have "een full$ given
her. .t is( therefore( a mone$ claim arising from the emplo$er-emplo$ee relationship( hich clearl$ falls ithin the
3urisdiction of the !a"or Ar"iter and the 7!RC.
Additional infoC in the case the +C said the deduction as valid since santos as not entitled to the ta; e;emption thus(
valid deduction. Regarding sa separation pa$( hindi da pede( 1asi na1alaga$ sa 1asunduan sa retirement "enefit "aal na
sila tumangap ng i"ang "enefit( either retirement "enefit lang or ung separation pa$.