SMC V. ETCUBAN, et al.

FACTS:

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. In several meetings
convened by SMC with its employees, it was explained to them that the
distressed state of SMC was caused by its poor sales performance which, in
order to survive, called for a cutback in production and a corresponding
reduction in the work force. Because of this, SMC offered its Retrenchment
to Prevent Loss Program to its employees. The offering of the retrenchment
program was coupled with an unsolicited advise from SMC that it would be in
the best interest of the affected employees to avail of the said program
since, by doing so, they would be able to obtain their retrenchment benefits
and privileges with ease. 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 the representations of SMC, Etcuban, et al availed of the

retrenchment program. respondents were given their termination letters and
separation pay. Later, Etcuban, et al found out that SMC was never in
financial distress during the time they were being retrenched. In fact, it was
enjoying a growth in sales. They also found out that during the
retrenchment, SMC hired new employees. Etcuban, et al concluded that the
retrenchment program was a scheme to get rid of regular employees and to
avoid paying their actual benefits.

Etcuban, et al filed an action for the declaration of nullity of the

retrenchment program before the Labor Arbiter. The Labor Arbiter dismissed
the complaint on the ground of prescription based on Art 291. The NLRC
sustained the decision of the Labor Arbiter. On appeal to the CA, the decision
was reversed and remanded the case to the RTC for further proceedings
because the action was allegedly involved in a civil dispute.

ISSUE: Whether the CA erred in remanding the case to the RTC.

HELD:

YES. Under the Reasonable Causal Connection Rule, if there is a

reasonable causal connection between the claim asserted and the employer-
employee relations, then the case is within the jurisdiction of labor courts. In
the absence of such nexus, it is the regular courts that have jurisdiction.
 While Etcuban et al insists that their action is for the declaration of
nullity of their contract of termination, it is in fact an action for damages
emanating form employer-employee relations. First, their claim for damages
is grounded on their having been deceived into serving their employment
due to SMCs concocted financial distress and fraudulent retrenchment
program a clear case of illegal dismissal. Second, a comparison of
respondents complaint for the declaration of nullity of the retrenchment
program before the labor arbiter and the complaint for the declaration of
nullity of their contract of termination before the RTC reveals that the
allegations and prayer of the former are almost identical with those of the
latter except that the prayer for reinstatement was no longer included and
the claim for backwages and other benefits was replaced with a claim for
actual damages. These are telltale signs that respondents claim for damages
is intertwined with their having been separated from their employment
without just cause and, consequently, has a reasonable causal connection
with their employer-employee relations with SMC. Accordingly, it cannot be
denied that respondents claim falls under the jurisdiction of the labor arbiter
as provided in paragraph 4 of Article 217.

The Court is aware that the Civil Code provisions on contracts and
damages may be used as bases for addressing the claim of ETCUBAN, et al.
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 Labor Arbiter had the exclusive and original jurisdiction over
claims for moral and other forms of damages, so that the employee in the
proceedings before the Labor Arbiter should prosecute his claims not only for
reliefs specified under the Labor Code but also for damages under the Civil
Code. This is because an illegally dismissed employee has only a single
cause of action although the act of dismissal may be a violation not only the
Labor Code but also the Civil Code. For a single cause of action, the
dismissed employee cannot institute a separate action before the Labor
Arbiter for backwages and reinstatement and another action before the
regular court for the recovery of moral and other forms of damages because
splitting a single cause of action is procedurally unsound and obnoxious to
the orderly administration of justice.

HALAGUENA v PAL
FACTS:

Patricia Halaguena et al (petitioners) are flight attendants employed by

Philippine Airlines (respondents). Petitioners are members of the Flight
Attendants and Stewards Association of the Philippines (FASAP Union).
FASAP is a labor organization certified as the sole and exclusive certified as
the sole and exclusive bargaining representative of the flight attendants,
flight stewards and pursers of respondent. The Collective Bargaining
Agreement entered into by PAL and FSAP on July 11, 2001 contained a
section which provides that:

Section 144, Part A of the PAL-FASAP CBA, provides that:

A. For the Cabin Attendants hired before 22 November 1996:

3. Compulsory Retirement
Subject to the grooming standards provisions of this Agreement, compulsory
retirement shall be fifty-five (55) for females and sixty (60) for males.

Petitioners and several female cabin crews manifested that the

aforementioned CBA provision on compulsory retirement is discriminatory,
and demanded for an equal treatment with their male counterparts. This
demand was reiterated in a letter by petitioners' counsel addressed to
respondent demanding the removal of gender discrimination provisions in
the coming re-negotiations of the CBA

On July 29, 2004, petitioners filed a Special Civil Action for Declaratory
Relief with Prayer for the Issuance of Temporary Restraining Order and Writ
of Preliminary Injunction with the Regional Trial Court (RTC) of Makati City,
Branch 147.

RTC upheld its jurisdiction and issued the TRO stating that the petition
is not a labor dispute arising out of employer-employee relationship because
none is shown to exist. CA reversed stating that RTC had no jurisdiction over
the case. Hence, this petition for certiorari.

ISSUE: Whether the RTC has jurisdiction over the petitioners’ action
challenging the legality or constitutionality of the provisions on the
compulsory retirement age contained in the CBA between respondent PAL
and FASAP.

HELD:
 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.

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 disputes arising from an
employer-employee relationship which can only be resolved by reference to
the Labor Code, other labor statutes, or their collective bargaining
agreement.

Where the principal relief sought is to be resolved not by reference to

the Labor Code or other labor relations statute or a collective bargaining
agreement but by the general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to the labor arbiter and the
NLRC. In such situations, resolution of the dispute requires expertise, not in
labor management relations nor in wage structures and other terms and
conditions of employment, but rather in the application of the general civil
law. Clearly, such claims fall outside the area of competence or expertise
ordinarily ascribed to labor arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies disappears.

PORTILLO V LEITZ
FACTS:
Marietta Portillo (petitioner) was an employee of Leitz, Inc.
(respondent). On the tenth year of her employment, she was promoted to
Sales Representative and received a corresponding increase in basic monthly
salary and sales quota. With this, Portillo signed another letter agreement
containing a "Goodwill Clause”, in which she is prevented, within 3 years
from resignation, to engage directly or indirectly in an employment in which
the respondent is engaged in.

Three year thereafter, Portillo resigned from her employment and

demanded from Lietz Inc. for the payment of her remaining salaries and
commissions not paid to her upon such resignation. Later, within the 3-year
prohibitory period, Lietz learned that Portillo was hired by Ed Keller
Philippines, a direct competitor of Lietz, as head of its Pharma Raw Material
Department.

Portillo’s demands from Lietz, Inc. for the payment of her remaining
salaries and commissions went unheeded. Lietz Inc. gave Portillo the run
around, on the pretext that her salaries and commissions were still being
computed. She filed a complaint with the National Labor Relations
Commission (NLRC) for non-payment of 1½ months’ salary, two (2) months’
commission, 13th month pay, plus moral, exemplary and actual damages
and attorney’s fees. In its position paper, Lietz admitted liability for Portillo’s
money claims. However, Lietz raised the defense of legal compensation,
stating that Portillo’s money claims should be offset against her liability to
Lietz for liquidated damages for Portillo’s breach of the “Goodwill Clause” in
the employment contract when she became employed with Ed Keller.

ISSUE: Should Portillo’s money claims for unpaid salaries be offset against
Lietz’ claim for liquidated damages?

HELD:

NO. There is no causal connection between the petitioner employees’

claim for unpaid wages and the respondent employers’ claim for damages for
the alleged "Goodwill Clause" violation. Portillo’s claim for unpaid salaries did
not have anything to do with her alleged violation of the employment
contract as, in fact, her separation from employment is not "rooted" in the
alleged contractual violation. She resigned from her employment. She was
not dismissed. Portillo’s entitlement to the unpaid salaries is not even
contested. Indeed, Lietz Inc.’s argument about legal compensation
necessarily admits that it owes the money claimed by Portillo. The alleged
contractual violation did not arise during the existence of the employer-
employee relationship. It was a post-employment matter, a post-
employment violation.

PAUL V. SANTIAGO vs. CF SHARP CREW MANAGEMENT, INC

FACTS:
Petitioner had been working as a seafarer for Smith Bell Management,
Inc. (respondent) for about 5 yrs. In February 3, 1998, petitioner signed a
new contract of employment with respondent, with the duration of 9
months. The contract was approved by POEA. Petitioner was to be deployed
on board the “MSV Seaspread” which was scheduled to leave the port of
Manila for Canada on 13 February 1998.

A week before the date of departure, Capt. Pacifico Fernandez,

respondent’s Vice President, sent a facsimile message to the captain of “MSV
Seaspread,”, saying that it received a phone call from Santiago’s wife and
some other callers who did not reveal their identity and gave him some
feedbacks that Paul Santiago this time, if allowed to depart, will jump ship in
Canada like his brother Christopher Santiago. The captain of “MSV
Seaspread replied that it cancel plans for Santiago to return to Seaspread.

Petitioner thus told that he would not be leaving for Canada anymore.
Petitioner filed a complaint for illegal dismissal, damages, and attorney’s
fees against respondent and its foreign principal, Cable and Wireless
(Marine) Ltd. The Labor Arbiter (LA) favored petitioner and ruled that the
employment contract remained valid but had not commenced since
petitioner was not deployed and that respondent violated the rules and
regulations governing overseas employment when it did not deploy
petitioner, causing petitioner to suffer actual damages. On appeal by
respondent, NLRC ruled that there is no employer-employee relationship
between petitioner and respondent because the employment contract shall
commence upon actual departure of the seafarer from the airport or seaport
at the point of hire and with a POEA-approved contract. In the absence of an
employer-employee relationship between the parties, the claims for illegal
dismissal, actual damages, and attorney’s fees should be dismissed. But the
NLRC found respondent’s decision not to deploy petitioner to be a valid
exercise of its management prerogative. Petitioner filed MR but it was
denied. He went to CA. CA affirmed the decision of NLRC. Petitioner’s MR
was denied. Hence this case.

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

bar.
Held:

There is some merit in the petition. The parties entered into an

employment contract whereby petitioner was contracted by respondent to
render services on board “MSV Seaspread” for the consideration of
US$515.00 per month for 9 months, plus overtime pay. However,
respondent failed to deploy petitioner from the port of Manila to Canada.
Considering that petitioner was not able to depart from the airport or
seaport in the point of hire, the employment contract did not commence,
and no employer-employee relationship was created between the parties.
However, a distinction must be made between the perfection of the
employment contract and the commencement of the employer-employee
relationship. The perfection of the contract, which in this case coincided with
the date of execution thereof, occurred when petitioner and respondent
agreed on the object and the cause, as well as the rest of the terms and
conditions therein. The commencement of the employer-employee
relationship would have taken place had petitioner been actually deployed
from the point of hire. Thus, even before the start of any employer-
employee relationship, contemporaneous with the perfection of the
employment contract was the birth of certain rights and obligations, the
breach of which may give rise to a cause of action against the erring party.
Thus, if the reverse had happened, that is the seafarer failed or refused to
be deployed as agreed upon, he would be liable for damages.

Neither the manning agent nor the employer can simply prevent a
seafarer from being deployed without a valid reason. Respondent’s act of
preventing petitioner from departing the port of Manila and boarding “MSV
Seaspread” constitutes a breach of contract, giving rise to petitioner’s cause
of action. Respondent unilaterally and unreasonably reneged on its
obligation to deploy petitioner and must therefore answer for the actual
damages he suffered.
Despite the absence of an employer-employee relationship between
petitioner and respondent, the Court rules that the NLRC has jurisdiction
over petitioner’s complaint. The jurisdiction of labor arbiters is not limited to
claims arising from employer-employee relationships. Section 10 of R.A. No.
8042 (Migrant Workers Act), provides that:

Sec. 10. Money Claims. – Notwithstanding any provision of law to the

contrary, the Labor Arbiters of the NLR) shall have the original and exclusive
jurisdiction to hear and decide, within 90 calendar days after the filing of the
complaint, the claims arising out of an employer-employee relationship or by
virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of
damages.”

Since the present petition involves the employment contract entered

into by petitioner for overseas employment, his claims are cognizable by the
labor arbiters of the NLRC.
 Respondent is liable to pay petitioner only the actual damages in the
form of the loss of nine (9) months’ worth of salary as provided in the
contract. He is not, however, entitled to overtime pay. While the contract
indicated a fixed overtime pay, it is not a guarantee that he would receive
said amount regardless of whether or not he rendered overtime work. Even
though petitioner was prevented without valid reason from rendering regular
much less overtime service, the fact remains that there is no certainty that
petitioner will perform overtime work had he been allowed to board the
vessel. The amount stipulated in the contract will be paid only if and when
the employee rendered overtime work. Realistically speaking, a seaman, by
the very nature of his job, stays on board a ship or vessel beyond the
regular eight-hour work schedule.

For the employer to give him overtime pay for the extra hours when
he might be sleeping or attending to his personal chores or even just lulling
away his time would be extremely unfair and unreasonable.
The Court also holds that petitioner is entitled to attorney’s fees in the
concept of damages and expenses of litigation. Respondent’s basis for not
deploying petitioner is the belief that he will jump ship just like his brother, a
mere suspicion that is based on alleged phone calls of several persons whose
identities were not even confirmed. This Court has upheld management
prerogatives so long as they are exercised in good faith for the advancement
of the employer’s interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid
agreements. Respondent’s failure to deploy petitioner is unfounded and
unreasonable However, moral damages cannot be awarded in this case.
because respondent’s action was not tainted with bad faith, or done
deliberately to defeat petitioner’s rights, as to justify the award of moral
damages.
Seafarers are considered contractual employees and cannot be considered as
regular employees under the Labor Code. Their employment is governed by
the contracts they sign every time they are rehired and their employment is
terminated when the contract expires. The exigencies of their work
necessitates that they be employed on a contractual basis.
TOLOSA vs NLRC

FACTS:

Evelyn Tolosa, was the widow of Captain Virgilio Tolosa who was hired
by Qwana-Kaiun, through its manning agent, Asia Bulk, to be the master of
the Vessel named M/V Lady Dona. CAPT. TOLOSA had a monthly
compensation of US$1700, plus US$400.00 monthly overtime allowance. 
His contract officially began on November 1, 1992, as supported by his
contract of employment when he assumed command of the vessel in
Yokohama, Japan.  The vessel departed for Long Beach California, passing
by Hawaii in the middle of the voyage.  At the time of embarkation, CAPT.
TOLOSA was allegedly shown to be in good health. “During ‘channeling
activities’ upon the vessel’s departure from Yokohama sometime on
November 6, 1992, CAPT. TOLOSA was drenched with rainwater.  The
following day, November 7, 1992, he had a slight fever and in the
succeeding twelve (12) days, his health rapidly deteriorated resulting in his
death on November 18, 1992. It was alleged that the request for emergency
evacuation of Capt Tolosa was too late.

Because of the death of CAPT. TOLOSA, his wife, EVELYN, as

petitioner, filed a Complaint/Position Paper before the POEA against Qwana-
Kaiun, thru its resident-agent, Mr. Fumio Nakagawa, ASIA BULK, Pedro
Garate and Mario Asis, as respondents. The case was however transferred to
the NLRC, when the amendatory legislation expanding its jurisdiction, and
removing overseas employment related claims from the ambit of POEA
jurisdiction. Petitioner argues that her cause of action is not predicated on a
quasi delict or tort, but on the failure of private respondents -- as employers
of her husband (Captain Tolosa) -- to provide him with timely, adequate and
competent medical services under Article 161 of the Labor Code.
Respondents aver that the Labor Arbiter has no jurisdiction over the subject
matter, since her cause did not arise from an employer-employee relation,
but from a quasi delict or tort.  Further, there is no reasonable causal
connection between her suit for damages and her claim under Article 217 (a)
(4) of the Labor Code, which allows an award of damages incident to an
employer-employee relation.

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

HELD:

The SC held that the NLRC and the labor arbiter had no jurisdiction
over petitioner’s claim for damages, because that ruling was based on a
quasi delict or tort per Article 2176 of the Civil Code. After carefully
examining the complaint/position paper of petitioner, we are convinced that
the allegations therein are in the nature of an action based on a quasidelict
or tort. It is evident that she sued Pedro Garate and Mario Asis for gross
negligence. Petitioner’s complaint/position paper refers to and extensively
discusses the negligent acts of shipmates Garate and Asis, who had no
employer-employee relation with Captain Tolosa. The SC stressed that the
case does not involve the adjudication of a labor dispute, but the recovery of
damages based on a quasi delict.  The jurisdiction of labor tribunals is
limited to disputes arising from employer-employee relations.

Not every dispute between an employer and employee involves

matters that only labor arbiters and the NLRC can resolve in the exercise of
their adjudicatory or quasi-judicial powers.  The jurisdiction of labor arbiters
and the NLRC under Article 217 of the Labor Code is limited to disputes
arising from an employer-employee relationship which can only be resolved
by reference to the Labor Code, other labor statutes, or their collective
bargaining agreement.” While it is true that labor arbiters and the NLRC
have jurisdiction to award not only reliefs provided by labor laws, but also
damages governed by the Civil Code, these reliefs must still be based on an
action that has a reasonable causal connection with the Labor Code, other
labor statutes, or collective bargaining agreements. The central issue is
determined essentially from the relief sought in the complaint.  “Claims for
damages under paragraph 4 of Article 217 must have a reasonable causal
connection with any of the claims provided for in the article in order to be
cognizable by the labor arbiter.  Only if there is such a connection with the
other claims can the claim for damages be considered as arising from
employer-employee relations.” In the present case, petitioner’s claim for
damages is not related to any other claim under Article 217, other labor
statutes, or collective bargaining agreements.

Petitioner cannot anchor her claim for damages to Article 161 of the
Labor Code, which does not grant or specify a claim or relief.  This provision
is only a safety and health standard under Book IV of the same Code.  The
enforcement of this labor standard rests with the labor secretary. Thus,
claims for an employer’s violation thereof are beyond the jurisdiction of the
labor arbiter.  In other words, petitioner cannot enforce the labor standard
provided for in Article 161 by suing for damages before the labor arbiter. It
is not the NLRC but the regular courts that have jurisdiction over actions for
damages, in which the employer-employee relation is merely incidental, and
in which the cause of action proceeds from a different source of obligation
such as a tort. Since petitioner’s claim for damages is predicated on a quasi
delict or tort that has no reasonable causal connection with any of the claims
provided for in Article 217, other labor statutes, or collective bargaining
agreements, jurisdiction over the action lies with the regular courts not with
the NLRC or the labor arbiters. 

CENTURY PROPERTIES, INC vs BABIANO and CONCEPCION

Facts:

Babiano was hired by CPI as Director for Sales who eventually was
promoted for VP for Sales. He is receiving a salary, allowance and sales
commission. His employment contract contains a clauses which bars him
from disclosing confidential information to business competing with CPI while
he is employed and after 1 year from termination or resignation, otherwise
his compensation will be forfeited. Concepcion was hired as a Sales Agent
who was promoted to Project Director. She signed a Contract of Agency for
Project Director and receives a monthly subsidy, commission and incentive.
She signed two contracts and both stipulated that no employee employer
relationship exist. After receiving that Babiano provided a competitor with
information and being AWOL for 5 days, CPI sent a notice to explain why he
should not be charged with disloyalty, conflict of interest and breach of trust.
He tendered his resignation but later he was terminated 8 days later. He
revealed he was accepted as VP in a competitor company. 2 days before
Babiano tendered, Concepcion also tendered.

Babiano and Concepcion filed before the NLRC for non-payment of

commissions and damages against CPI. CPI maintained that the they are
just agents tasked with selling projects, there was due process and
termination was based on just cause.

The Labor Arbiter ruled in favor of CPI. On Appeal, the NLRC concurred
with the Labor Arbtiter, that Babiano’s acts constituted just cause for
termination however forefeiture is confiscatory and unreasonable. CPI went
to CA, while the affirmed the NLRC ruling, it ruled that there is a proper
money claim from employee-employer relationship. Hence this appeal.

Issue:

1. WON there was a breach of contract?

2. WON the CPI would be liable for unpaid commissions?

Held:

1. Yes. The Confidentiality and Non-Compete Clause is not limited to acts

done after the cessation of employer-employee relationship. Babiano
categorically admitted that he sought employment with a competitor before
his formal resignation. This is a glaring violation of the Confidentiality and
Non-Compete Clause.
2. Yes. There exists an employer-employee relationship. This is proven by
(a) CPI hired and
promoted Concepcion (b) the monthly "subsidy" and cash incentives that
Concepcion was
receiving from CPI are actually remuneration in the concept of wages (c) CPI
had the power to discipline or even dismiss Concepcion (d) CPI possessed
the power of control because in the performance of her duties as Project
Director, she did not exercise independent discretion. While the employment
contract is denominated as "Contract of Agency for Project Director" the
existence of employer-employee relations could not be negated by the
mereexpedient of repudiating it in a contract. since there exists an
employer-employee relationship between Concepcion and CPI, thus the CA is
correct in
ruling that Labor Code, it nonetheless failed to include all of respondents'
earned commissions thus, necessitating the increase in award of unpaid
commissions in Concepcion's favor.

EDUARDO G. EVIOTA vs CA, et al

GR 152121; 29 July 2003

FACTS:

Respondent Standard Chartered Bank (SCB) and petitioner Eduardo G.

Eviota (Eviota) executed a contract of employment under which Eviota was
employed by SCB as Compensation and Manager, VP. However, Eviota
abruptly resigned from SCB barely a month after his employment and
rejoined his former employer.

SCB filed a complaint against Eviota alleging that: (1) Eviota’s actions
constitute a clear violation of Articles 19, 20 and 21 of Republic Act No. 386.
The manner in and circumstances under which he exercised the right to
terminate his employment with the Bank for no reason are clearly abusive
and contrary to the rules governing human relations; (2) Eviota failed to
comply with the requirement of Article 285 (a) of Presidential Decree No.
442 where an employee may terminate without just cause the employer-
employee relationship by serving written notice on the employer at least one
(1) month in advance; (3) Eviota gave false and derogatory statements that
the Bank had failed to deliver what it had purportedly promised have
besmirched the Banks reputation and depicted it as a contract violator and
one which does not treat its employees properly. These derogatory
statements have injured the Banks business standing in the banking
community, and have undermined the Banks ability to recruit and retain the
best personnel.

Eviota filed a motion to dismiss the complaint on the ground that the
action for damages of the respondent bank was within the exclusive
jurisdiction of the Labor Arbiter under paragraph 4, Article 217 of the Labor
Code of the Philippines. The petitioner averred that the respondent banks
claim for damages arose out of or were in connection with his employer-
employee relationship with the respondent bank or some aspect or incident
of such relationship.

ISSUE: Whether the Labor Arbiter has jurisdiction over the case on hand

HELD:
NO. Case law has it that the nature of an action and the subject matter
thereof, as well as which court has jurisdiction over the same, are
determined by the material allegations of the complaint and the reliefs
prayed for in relation to the law involved.

Not every controversy or money claim by an employee against the

employer or vice-versa is within the exclusive jurisdiction of the labor
arbiter. A money claim by a worker against the employer or vice-versa is
within the exclusive jurisdiction of the labor arbiter only if there is a
reasonable causal connection between the claim asserted and employee-
employer relation. Absent such a link, the complaint will be cognizable by
the regular courts of justice.

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. In Georg Grotjahn GMBH & Co. v. Isnani, we held that the
jurisdiction of the Labor Arbiter under Article 217 of the Labor Code, as
amended, is limited to disputes arising from an employer-employee
relationship which can only be resolved by reference to the Labor Code of
the Philippines, other labor laws or their collective bargaining agreements.

In this case, the private respondents first cause of action for damages
is anchored on the petitioners employment of deceit and of making the
private respondent believe that he would fulfill his obligation under the
employment contract with assiduousness and earnestness. The petitioner
volte face when, without the requisite thirty-day notice under the contract
and the Labor Code of the Philippines, as amended, he abandoned his office
and rejoined his former employer; thus, forcing the private respondent to
hire a replacement. The private respondent was left in a lurch, and its
corporate plans and program in jeopardy and disarray. Moreover, the
petitioner took off with the private respondents computer diskette, papers
and documents containing confidential information on employee
compensation and other bank matters. On its second cause of action, the
petitioner simply walked away from his employment with the private
respondent sans any written notice, to the prejudice of the private
respondent, its banking operations and the conduct of its business. Anent its
third cause of action, the petitioner made false and derogatory statements
that the private respondent reneged on its obligations under their contract of
employment; thus, depicting the private respondent as unworthy of trust.

It is evident that the causes of action of the SCB against the Eviota do
not involve the provisions of the Labor Code of the Philippines and other
labor laws but the New Civil Code. Thus, the said causes of action are
intrinsically civil. There is no causal relationship between the causes of
action of the SCB causes of action against Eviota and their employer-
employee relationship. The fact that the SCB was the erstwhile employer of
the petitioner under an existing employment contract before the latter
abandoned his employment is merely incidental. In fact, Eviota had already
been replaced by the SCB before the action was filed against Eviota.
Smart Communications vs Regina Astroga

Facts:
 Regina Astroga was employed by respondent Smart Communications
Incorporated (SMART) on May 8,1997 as District Sales Manager of the
Corporate Sales Marketing Group/Fixed Services Division (CSMG/FSD). As
manager, Astroga enjoyed additional benefits, namely, annual performance
incentive equivalent to 30% of her annual gross salary, a group life and
hospitalisation insurance coverage, and a car plan in the amount of
P455,000.00.

In February 1998, SMART launched an organisational realignment to

achieve more efficient operations. In the process, Astroga was terminated of
her employment on the ground of redundancy. On May 1998, SMART sent a
letter to Astroga demanding that she pay the current market value of the
Honda Civic Sedan which was given to her under the company’s car plan
program, or to surrender the same to the company.

Astroga, however, failed and refused to do either, thus prompting SMART to

file a suit for replevin with the Regional Trial Court of Makati (RTC) on
August 1998. Astroga moved to dismiss the complaint on grounds of lack
jurisdiction, failure to state cause of action, litis pedentiA and forum-
shopping. Astroga posted that the regular courts have no jurisdiction over
the complaint because the subject matter pertains to a benefit arising out of
an employment contract, hence, jurisdiction over the same is vested in the
labor tribunal.

RTC denied the motion to dismiss stating that replevin is to enforce a

right to possess. The Court of Appeals on the other hand stated that Labor
Tribunal has the proper jurisdiction over the case, since her car privilege is a
benefit arising out of employer-employee relationship. Thus the claim for
such falls squarely to the original and exclusive jurisdiction of the labor
arbiters and the NLRC

Issue: Whether the court of appeals was correct in holding that the
regional trial court has no jurisdiction over the complaint for recovery of a
car which Astroga acquires as part of employee benefit.

Held: No, the RTC rightfully assumed jurisdiction over the suit and acted well
within its discretion in denying the motion of Astroga. The demand of SMART
for payment of the value of the car or in the alternative the surrender of it is
not a labor dispute but a civil one. It involves the relationship of debtor and
creditor not wmployee employer relations. As such, the dispute falls within
the jurisdiction of the regular courts.

Replevin is a possessory action the gist of which is the right of

possession of the plaintiff. The primary relief sought therein is the return of
the property in specie wrongfully detained by another person. It is an
ordinary statutory proceeding to adjudicate rights to the title of possession
of personal property. The question of whether or not a party has the right of
possession over the property involved and if so, whether the Adverse party
has wrongfully taken and detained said property as to require its return to
plaintiff, is outside the pale of competence of labor tribunals and beyond the
field of specializations of Labor Arbiters.

The labor dispute involved is not intertwined with the issue of Replevin
Case. The respective issues raised in each forum can be resolved
independently of the other. The determination of the question of who has
the better right to tAke possession of the car and whether petitioners can
deprive the respondent, as the legal possessor of the car, of that right to
possess is addressed to the competence of Civil Courts.

U-BIX CORPORATION and EDILBERTO B. BRAVO v. VALERIE ANNE H.

HOLLERO 
FACTS:

Valerie Anne H. Hollero was hired as a management trainee and was

eventually promoted to facilities manager by U-Bix Corporation. Hollero and
three other employees were later sent to the United States for two months
of training for a newly acquired franchise. Before she left, she signed a
contract with U-Bix which reads that ―VALERIE ANNE H. HOLLERO shall
remain in the employ of U-BIX CORPORATION for a period of five (5) years
from completion of her U.S. Training otherwise she shall reimburse U-BIX
CORPORATION for all costs (prorated) and expenses which U-BIX
CORPORATION incurred for her training in the U.S

U-Bix, citing Hollero’s supposed ―pattern of tardiness, absences,

neglect of duties and lack of interest,‖ terminated her employment for loss of
trust and confidence. U-Bix then filed against Hollero before the Labor
Arbiter for the reimbursement of training expenses and damages.
Subsequently, Hollero also filed a complaint against U-Bix for illegal
dismissal. 

The Labor Arbiter rendered a decision declaring that the dismissal of

Hollero is valid and legal and ordered her to pay U-Bix the reimbursement of
her training. It dismissed Hollero’s complaint for lack of merit. On appeal
before the National Labor Relations Commission, the NLRC reversed the LA’s
decision. A Motion for Reconsideration was filed but subsequently denied by
NLRC. The Court of Appeals affirmed the lower court’s decision. 

ISSUES: Whether or not Hollero was illegally dismissed by U-Bix 

HELD: 

An employer who seeks to dismiss an employee must afford the latter

ample opportunity to be heard and to defend himself with the assistance of
his representative if he so desires. 

U-Bix failed to discharge the burden of proof that Hollero’s dismissal is

for a valid and just cause . In termination cases, the employer has the
burden of proving that the dismissal is for a valid and just cause. While an
employer enjoys a wider latitude of discretion in terminating the
employment of managerial employees, managerial employees are also
entitled to security of tenure and cannot be arbitrarily dismissed at any time
and without cause as reasonably established in an appropriate
investigation. In the case at bar, U-Bix failed to substantiate their allegations
of Hollero’s habitual absenteeism, habitual tardiness, neglect of duties, and
lack of interest. Daily time records, attendance records, or other
documentary evidence attesting to these grounds could have readily been
presented to support the allegations but none was. 

The merits of a complaint for illegal dismissal do not depend on its

prayer but on whether the employer discharges its burden of proving that
the dismissal is valid. U-Bix failed to comply with the procedural due process
of dismissing an employee In another vein, the Court finds that U-Bix and
Bravo failed to comply with the procedural requirements for a valid
dismissal. Hollero being a manager did not excuse them from observing such
procedural requirements. The notice does not inform outright the employee
that an investigation will be conducted on the charges particularized therein
which, if proven, will result to her dismissal. It does not contain a plain
statement of the charges of malfeasance or misfeasance nor categorically
state the effect on her employment if the charges are proven to be true. It
does not apprise Hollero of possible dismissal should her explanation prove
unsatisfactory. Besides, the U-Bix and Bravo did not even establish that
Hollero received the memorandum. 

Neither did U-Bix and Bravo show that they conducted a hearing or
conference during which Hollero, with the assistance of counsel if she so
desired, had opportunity to respond to the charge, present her evidence, or
rebut the evidence presented against her. The meeting with Hollero on
December 23, 1996 did not satisfy the hearing requirement, for Hollero was
not given the opportunity to avail herself of counsel. 

Article 277(b) of the Labor Code mandates that an employer who seeks to
dismiss an employee must afford the latter ample opportunity to be heard
and to defend himself with the assistance of his representative if he so
desires. Expounding on this provision, the Court held that ample opportunity'
connotes every kind of assistance that management must accord the
employee to enable him to prepare adequately for his defense including legal
representation.

PLACIDO O. URBANES vs CA, et al

GR 138379

FACTS:
Jerry Rilles started working as a security guard in Placido O Urbanes,
Jr’s agency, the Catalin Security Agency. The contract of CSA with the Social
Security System (SSS), where he was assigned, expired. He then reported
to petitioners office on several occasions for a new assignment, to no avail.

Rilles filed a complaint before the National Labor Relations Commission

(NLRC) against Urbanes and CSA for illegal dismissal, illegal deduction,
underpayment of wages, non-payment of premium pay for holiday, rest day,
holiday pay, service incentive leave pay, 13th month pay, back wages and
attorneys fees. In the position paper, he submitted to the NLRC stated Rilles
alleged that: after his assignment with SSS Buendia, he was informed by Mr.
Bacal, a former supervisor, that there was a vacant position in the National
Home Mortgage Finance Corporation; when he reported, as instructed by the
personnel department, a certain Melody of the department said that there
was no post available for him. The CSA offered him a post in Bataan which
he rejected as he was residing in Manila. He again asked for an assignment
but was unsuccessful. A post in Manila was finally offered to him but with the
condition that he sign a termination contract first; he refused such offer.

The Petitioner and his agency contend that Rilles was not given the
run-around by the agency since there was really a vacant post, as referred
to by Mr. Bacal, but such post was filled up. He offered Rilles a vacant post
in Bataan, where Rilles was assigned and where there are stay-in quarters
free of charge, but Rilles refused. It is not true that Rilles was offered a post
in Manila with the condition that he must sign a termination contract. It is
also not true that Rilles reported to the agency because if he did, he would
have been given an assignment since there were several vacancies in the
Public Estates Authority in Pasay and in the MWSS Caloocan. Even now there
are several vacancies in Metro Manila where Rilles could be assigned if only
he would accept.

Labor Arbiter Jose G. de Vara rendered his decision in favor of Rilles,

explaining that while it is true that complainant was validly relieved from his
post at the SSS Makati, it is still the duty of the CSA to provide a
reassignment to Rilles considering that his relief from his last post does not
constitute a severance of employer-employee relationship. If it were true
that complainant did not report for reassignment or even refused to accept
any assignment, it is still incumbent on the part of the respondents to notify
the complainant in writing at his last known address to report for work under
pain of disciplinary action. The failure of an employee to report for work or
to accept any assignment does not ipso facto result in abandonment for the
law particularly Rule XIV, Section 2, Book V of the Omnibus Implementing
Rules and Regulations of the Labor Code specifically enjoins the employer to
send a written notice to the concerned employee at his last known address.
This written notice that respondents could have sent to the complainant
should have included a Duty Detail Order if indeed there were vacant posts
available for the complainant.

The CSA appealed and the NLRC affirmed the decision of the Labor
Arbiter. Their Motion for Reconsideration was likewise denied. CSA then filed
a petition for Certiorari with the Court, which was however referred to the
CA. The CA denied the petition for Certiorari.

ISSUE: Whether or not respondent Rilles was illegally dismissed by CSA

HELD:
YES. It is axiomatic that the findings of the Labor Arbiter, when
affirmed by the NLRC and the Court of Appeals, are binding on this Court
unless patently erroneous. This is because it is not the function of this Court
to analyze or weigh all over again the evidence already considered in the
proceedings below; or reevaluate the credibility of witnesses; or substitute
the findings of fact of an administrative tribunal which has expertise in its
special field.

Thus the issue that should have been threshed out below is not just
whether or not Rilles was illegally dismissed, but whether or not the
assignment offered to him in Bataan was unreasonable and prejudicial to his
interest which is tantamount to a constructive dismissal.

As a general rule, the right to transfer or reassign employees is

recognized as an employers right and the prerogative of management. As
the exigency of the business may require, an employer, in the exercise of his
prerogative may transfer an employee, provided that said transfer does not
result in a demotion in rank or diminution in salary, benefits and other
privileges of the employee; or is not unreasonable, inconvenient or
prejudicial to the latter; or is not used as a subterfuge by the employer to
rid himself of an undesirable worker. While petitioner has the prerogative to
transfer its guards pursuant to business exigencies, he has the burden,
however, to show that the exercise of such prerogative was not done with
grave abuse of discretion or contrary to justice and fair play.

This petitioner failed to do. He argues in his present petition that

respondent Rilles was continuously offered an assignment in Bataan, and it
is only Rilles who refuses, thus there cannot be any constructive dismissal.
In the position paper submitted before the NLRC, however, petitioner
claimed that there were many posts available in Manila where Rilles could be
posted if only Rilles would agree. Thus, instead of adequately showing the
necessity of such transfer to Bataan, petitioner cast doubt as to the urgency
of such decision. The Labor Arbiter also noted that while petitioner claimed
that there are many posts in Manila which it could give to respondent if only
respondent would agree, no offer was ever made by petitioner in the
conferences conducted before his office. Also, if such offer of an assignment
in Manila was actually made, there would have been no need for Rilles to
institute the complaint before the NLRC.While transfer of assignment which
may occasion hardship or inconvenience is allowed, this Court however shall
not countenance a transfer that is unnecessary, inconvenient and prejudicial
to employees.

INTEL TECHNOLOGY PHILIPPINES, INC.,Petitioner, v. NATIONAL LABOR

RELATIONS COMMISSION AND JEREMIAS CABILES, Respondents.

FACTS:

Cabiles was initially hired by Intel Phil. on April 16, 1997 as an

Inventory Analyst. He was subsequently promoted several times over the
years and was also assigned at Intel Arizona and Intel Chengdu. He later
applied for a position at Intel Semiconductor Limited Hong Kong (Intel HK).
He received a letter offering the position of Finance Manager by Intel HK.
Before accepting the offer, he inquired from Intel Phil., through an email the
consequences of accepting the newly presented opportunity in Hong Kong.
He asked the process he need to go through regarding the benefits and
clearances in Intel Phils and would an email notification be enough. He also
clarified whether he will receive retirement benefits considering he will be in
the service for 10 years on April 16, 2007 with Intel and should he accept
the offer of Intel HK, will the 9.5 years in the service be rounded of to 10
years.

Intel Phil., through Penny Gabronino, replied that he will not be eligible to
receive his retirement benefit not having reached 10 years of service at the
time he moved to Hong Kong. Further, Intel do not round up the years of
service. In case he move back to the Philippines his total tenure of service
will be computed less on the period that you are out of Intel Philippines. On
January 31, 2007, Cabiles signed the job offer.

On March 8, 2007, Intel Phil. issued Cabiles his "Intel Final Pay Separation
Voucher" indicating a net payout ofP165,857.62. On March 26, 2007, Cabiles
executed a Release, Waiver and Quitclaim in favor of Intel Phil.
acknowledging receipt of P165,857.62 as full and complete settlement of all
benefits due him by reason of his separation from Intel Phil. On September
8, 2007, after seven (7) months of employment, Cabiles resigned from Intel
HK.

About two years thereafter, Cabiles filed a complaint for non-payment of

retirement benefits and for moral and exemplary damages with the NLRC.
He insisted that he was employed by Intel for 10 years and 5 months from
April 1997 to September 2007 a period which included his seven (7) month
stint with Intel HK. Thus, he believed he was qualified to avail of the benefits
under the company's retirement policy allowing an employee who served for
10 years or more to receive retirement benefits. The LA held that Cabiles did
not sever his employment with Intel Phil. when he moved to Intel HK, similar
to the instances when he was assigned at Intel Arizona and Intel Chengdu.

On appeal, the NLRC affirmed the LA decision. It determined that his

decision to move to Intel HK was not definitive proof of permanent
severance of his ties with Intel Phil. It treated his transfer to Hong Kong as
akin to his overseas assignments in Arizona and Chengdu. As to the email
exchange between Cabiles and Intel Phil., the NLRC considered the same as
insufficient to diminish his right over retirement benefits under the law.
Meanwhile, the NLRC disregarded the Waiver because at the time it was
signed, the retirement pay due him had not yet accrued.
Aggrieved, Intel Phil. elevated the case to the CA via a petition for certiorari
with application for a Temporary Restraining Order (TRO). The application
for TRO was denied. A motion for reconsideration, was filed, but it was also
denied in a Resolution, which also dismissed the petition for certiorari.

Intel Phil. filed a motion for reconsideration.

The NLRC issued a writ of execution against Intel Phil. to pay P3,201,398.60
and P31,510.00 representing the execution fees. Intel Phil. satisfied the
judgment on by paying the amount of P3,201,398.60 which included the
applicable withholding taxes due and paid to the BIR. Cabiles received a net
amount ofP2,485,337.35, covered by a BPI Managers check. Intel Phil. filed
restitution of all the amounts paid by them pursuant to the NLRC's writ of
execution and the NLRC order.

Intel filed a petition for review, however, the CA dismissed the same,
affirming the NLRC decision.

ISSUE: Whether the CA erred in ruling that private respondent was entitled
to retire under Intel Philippines retirement plan.

HELD:

The Court of Appeals decision is reversed. Resignation is the formal

relinquishment of an office, the overt act of which is coupled with an intent
to renounce. This intent could be inferred from the acts of the employee
before and after the alleged resignation.

In contemplating whether to accept the offer from Intel HK, Cabiles

wrote Intel Phil. through Gabronino. This communication manifested two of
his main concerns: a) clearance procedures; and b) the probability of getting
his retirement pay despite the non-completion of the required 10 years of
employment service. Beyond these concerns, however, was his acceptance
of the fact that he would be ending his relationship with Intel Phil. as his
employer. The words he used - local hire, close, clearance denote nothing
but his firm resolve to voluntarily disassociate himself from Intel Phil. and
take on new responsibilities with Intel HK.

His acceptance of the offer meant letting go of the retirement benefits

he now claims as he was informed through email correspondence that his
9.5 years of service with Intel Phil. would not be rounded off in his favor. He,
thus, placed himself in this position, as he chose to be employed in a
company that would pay him more than what he could earn in Chengdu or in
the Philippines. Cabiles views his employment in Hong Kong as an
assignment or an extension of his employment with Intel Phil.

The continuity, existence or termination of an employer-employee

relationship in a typical secondment contract or any employment contract for
that matter is measured by the following yardsticks: 1. the selection and
engagement of the employee; 2. the payment of wages; 3. the power of
dismissal; and 4. the employers power to control the employees conduct.
Victorio Meteor v. Creative Creatures Inc, G.R. No. 171275, July 13, 2009
As applied, all of the above benchmarks ceased upon Cabiles assumption of
duties with Intel HK on February 1, 2007. Intel HK became the new
employer.

Undoubtedly, Cabiles decision to move to Hong Kong required the

abandonment of his permanent position with Intel Phil. in order for him to
assume a position in an entirely different company. Clearly, the "transfer"
was more than just an assignment. It constituted a severance of Cabiles
relationship with Intel Phil., for the assumption of a position with a different
employer, rank, compensation and benefits.

Hence, Cabiles theory of secondment must fail.

What distinguishes Intel Chengdu and Intel Arizona from Intel HK is the lack
of intervention of Intel Phil. on the matter. In the two previous transfers,
Intel Phil. remained as the principal employer while Cabiles was on a
temporary assignment.

On the issue of quit claim SC stated that not all waivers and quitclaims
are invalid as against public policy. If the agreement was voluntarily entered
into and represents a reasonable settlement, it is binding on the parties and
may not later be disowned simply because of a change of mind. It is only
where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the questionable
transaction. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction
must be recognized as a valid and binding undertaking. Goodrich
Manufacturing Corporation, v. Ativo, G.R. No. 188002, February 1, 2010

Suffice it to state that nothing is clearer than the words used in the Waiver
duly signed by Cabiles - that all claims, in the present and in the future,
were waived in consideration of his receipt of the amount of P165,857.62.
Because the waiver included all present and future claims, the non-accrual of
benefits cannot be used as a basis in awarding retirement benefits to him.

The Supreme Court also ruled that Cabiles is not entitled to the
Retirement Benefits Having effectively resigned before completing his 10th
year anniversary with Intel Phil. and after having validly waived all the
benefits due him, if any, Cabiles is hereby declared ineligible to receive the
retirement pay pursuant to the retirement policy of Intel Phil. For that
reason, Cabiles must return all the amounts he received from Intel Phil.
pursuant to the Writ of Execution issued by the NLRC.