1. Dayag v. Hon. Canizares, GR 124193, March 06, 1998, Romero, J.

(S1(c) of NLRC Rules,

stating that venue of action is where the employees regularly work, is merely permissive,
provided the venue is not oppressive to the employer)
FACTS:
Petitioners Dayag et al. alleged that they were hired by respondent Young’s Construction (owned
by Alfredo Young) as tower crane operators in Metro Manila. Later, they were transferred to
Cebu City to work at the construction of his Shoemart Cebu project. Petitioners purportedly left
the company due to harassment by Young and went back to Manila where they reside.
Petitioners filed a complaint for illegal dismissal, non-payment of wages, overtime pay, premium
pay, holiday pay, SIL, 13 month pay, and exemplary damages against Young in the NCR
Regional Arbitration Branch of the NLRC. Young filed a motion to transfer the case to the RAB
Region VII of NLRC, claiming that the workplace where petitioners were regularly assigned was
in Cebu City, and under S1(a) of Rule IV of the NLRC Rules of Procedure, the case should have
been filed in Cebu City.

Petitioners opposed, arguing that they were residents of Manila and could not afford trips to
Cebu. They claimed that Young had a main office in Corinthian Gardens, Quezon City while
Young countered that this was not his principal place of business but his residence, which he
also used as correspondent office for Young’s Construction.

LA Canizares ordered the transfer of the case to the Region VII RAB. NLRC affirmed. Hence
this petition.

ISSUE:
Whether the transfer of the case to Cebu, which is where petitioners-workers had previously
regularly worked, where petitioners-workers reside in Metro Manila, and where the NLRC Rules
require that the venue of cases should be where the workers regularly work, was proper.
HELD: NO.
(SC at first said that there is no merit in petitioners’ argument for these reasons:
1) It is improper to nullify Young’s motion to transfer on a mere technicality [as against
petitioners’ claim that the motion did not specify the time and date when it would be heard by the
LA, violating the RoC, S4, and 5, Rule 15]. Rules of procedure should be interpreted as to help
secure and not defeat justice.
2) There is no waiver of right to contest venue by Young [as against petitioners’ claim that
Young is estopped from questioning venue since the motion to transfer was a position paper, and
S1(c) of Rule IV of the NLRC Rules says that “when improper venue is not objected to before or
at the time of filing of position papers, such question shall be deemed waived.”]. SC said that
there is no waiver when a party, like Young, questions venue simultaneously with or “at the
time” of filing of the position papers.
3) While objections to venue are deemed waived if respondent manifests satisfaction, thru
conduct, with the venue until after trial or abides by it until the matter is heard, there is no waive
rby Young since he consistently and persistently contested venue.
4) Petitioners’ reliance on Nestl PH Inc v. NLRC and Cruzvale Inc. v. Laguesma is misplaced. In
Nestl, Rule IV of the NLRC Rules was held to be an incomplete rule on venue, so Rule 4, S2 of
RoC, having suppletory effect, was applied, but only in cases where petitioners are labor unions
or where a single act of the employer gives rise to a cause of action common to many employees
working in different branches or workplaces of the former. These do not apply here.

Cruzvale involved a certification election. There is no certification election in this case. )

But SC eventually held as follows:

1) Young cannot derive comfort from the foregoing discussion since this petition has been
overtaken by Sulpicio Lines Inc. v. NLRC, where SC held that the question of venue essentially
pertains to the trial and relates more to the convenience of the parties rather than upon the
substance and merits of the case. It underscored the fact that the permissive rules underlying
provisions on venue are intended to assure convenience for the plaintiff and his witnesses and
to promote the ends of justice. With more reason does the principle find applicability in cases
involving labor and management because of the doctrine well-entrenched in our
jurisdiction that the State shall afford full protection to labor. The Court held that Section
1(a), Rule IV of the NLRC Rules of Procedure on Venue was merely PERMISSIVE, for the
said section uses the word “may”, allowing a different venue when the interests of substantial
justice demand a different one. The constitutional protection accorded to labor is paramount,
provided the venue chosen is not oppressive to the employer.

2) The rational is that the worker, being the economically-disadvantaged party as petitioner or
respondent, the nearest governmental machinery to settle the dispute must be placed at his
immediate disposal. In fact, even in cases where venue was stipulated by the parties, the same
was set aside if it would lead to a situation so grossly inconvenient to the party as to virtually
negate his claim.

3) Here, the venue of NCR-RAB is not oppressive to Young since he ahs his residence in
Corinthian Gardens, which is also his correspondent office. The filing of the suit in the NCR
RAB will not cause him as much inconvenience as it would petitioners, who are residents of
Manila, if the same was heard in Cebu.

2. National Union of Bank Employees v. Hon. Lazaro, GR L-56431, January 19, 1988,
Sarmiento, J., Second Division (A ULP case and its civil aspect, [claim for damages] falls
within the jurisdiction of the LA)
FACTS:
Commercial Bank and Trust Company (CBTC) entered into a CBA with the CBTC Union,
representing rank and file employees and which is an affiliated local of the National union of
Bank Employees, a national labor organization. The CBA was effective until June 30, 1980 with
automatic renewal clause until the parties execute a new agreement. On May 20, 1980, the union
with NUBE proposed renegotiation of a new CBA. But CBTC suspended negotiations with the
union. CBTC meanwhile entered into a merger with BPI which assumed all assets and liabilities
thereof.

The union filed in CFI, presided by respondent Judge Lazaro, a complaint for specific
performance, damages, and preliminary injunction against private respondents. The complaint
alleged that BPI, principal respondent according to petitioners, induced CBTC to violate the
existing CBA in the process of renegotiation. Petitioners claim bad faith etc. in violation of Arts.
21 and 28 of NCC.

CFI dismissed the case for lack of jurisdiction, holding that the complaint partook of an ULP
dispute notwithstanding the incidental claim for damages, thus jurisdiction is with the LA. Hence
this petition.

ISSUE:
Whether the courts have jurisdiction over a ULP dispute with incidental claim for damages.
HELD: NO.
1) The claim that BPI induced CBTC to violate the CBA consists mainly of the civil aspect of
the ULP charge referred to in Art. 247 of the Labor Code. Under Art. 248 of LC, it shall be an
ULP:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-
organization;
(g) To violate the duty to bargain collectively as prescribed by this Code;
The act complained of embraces either provision, whether it involved an accompanying violation
of the NCC. Civil implications thereof do not defeat its nature as a fundamental labor
offense.

2) The damages allegedly suffered by petitioners only form part of the civil component of the
injury from the ULP. Under Article 247 of the Code, "the civil aspects of all cases involving
unfair labor practices, which may include claims for damages and other affirmative relief,
shall be under the jurisdiction of the labor arbiters."

3) Petitioners claimed injury from tort under Art. 1314 of NCC does not necessarily give courts
jurisdiction to try the damage suit. Jurisdiction is conferred by law and not by the nature of
the action. Civil controversies are not the exclusive domain of the courts. PD 442 vests such
jurisdiction upon labor arbiters, a jurisdiction courts may not assume.

4) That BPI is not a party to the CBA and thus “cannot be sued for ULP at the time of action”
cannot bestow the court jurisdiction it does not have. it is not filing of an unfair labor case in the
Industrial Court that divests CFI jurisdiction over actions properly belonging to the former. It is
the existence of a controversy that properly falls within the exclusive jurisdiction of the
Industrial Court and to which the civil action is linked or connected that removes said civil
case from the competence of the regular courts.

5) Also, to hold that alleged tortious acts attributed to BPI may be subject to a separate suit is to
sanction split jurisdiction, an offense against the orderly administration of justice.

6) Petitioners’ reliance on Calderon v. CA is not well-taken since this has lost its persuasive
force by subsequent cases and the promulgation of PD 1691, restoring jurisdiction to decide
money claims unto Las.

7) That BPI was not an employer at the time the act was committed does not abate recourse to
the LA. BPI assumed “all assets and liabilities” of CBTC. Also, under the Corporation Code,
 “5. The surviving or consolidated corporation shall be responsible and liable for all the
liabilities and obligations of each of the constituent corporations in the same manner as if
such surviving or consolidated corporation had itself incurred such liabilities or
obligations; xxx”

3. Mainland Construction Co., Inc. v. Movilla, GR 118088, November 23, 1995,

Hermosisima, Jr., J., First Division. (That an employee is a corporate officer does not
automatically make a dispute between him and the corporation intra-corporate.)
FACTS:
Ernesto Movilla was hired as CPA in 1977 by Mainland. He was promoted to Administrative
Officer and recorded with a fixed salary of P4,700, registered with the SSS as employee of
Mainland. His contributions to SSS and ECC were deducted from his earnings by Mainland.
Later, an organizational meeting was held and the Board of Directors elected Ernesto Movilla
as administrative manager.

In 1991, DOLE conducted a routine inspection of Mainland and found that it committed
irregularities such as underpayment of wages and unpaid wages, holiday pay, SIL, and 13 th
month pay. DOLE ordered Mainland to pay its 13 employees, including Movilla. Mainland paid
all these employees except Movilla.

Thus, Ernesto Movilla filed a case against Mainland et al. for unpaid wages, separation pay,
attorney’s fees with the DOLE Regional Arbitration Branch XI, Davao. Ernesto died and was
substituted by his heirs with the LA’s consent.

The LA dismissed the complaint on the ground of lack of jurisdiction, ruling that this is an intra-
corporate controversy within the jurisdiction of SEC pursuant to PD 902-A. NLRC reversed,
ruling that the case was a labor dispute and thus, NLRC had jurisdiction. Hence this petition.

ISSUE:
Whether a dispute between a corporation and a corporate officer is automatically an intra-
corporate dispute since it is one of the relatioships under S5(b) of PD 902-A stated as “arising
out of intra-corporate” relations.
HELD: NO.
1) In order that the SEC can take cognizance of a case, the controversy must pertain to any of the
following relationships: a) between the corporation, partnership or association and the public; b)
between the corporation, partnership or association and its stockholders, partners, members or
officers; c) between the corporation, partnership or association and the State as far as its
franchise, permit or license to operate is concerned; and d) among the stockholders, partners or
associates themselves.

2) That the parties involved in the controversy are all stockholders or that the parties are the
stockholders and the corporation does NOT necessarily place the dispute within the
jurisdiction of SEC. The BETTER POLICY in determining jurisdiction should be to consider
the concurrent factors like the STATUS OR RELATIONSHIP of the parties or the NATURE
OF THE QUESTION subject of the controversy. In the absence of any one of these factors,
SEC will not have jurisdiction. Also, it does not necessarily follow that every conflict between
the corporation and its stockholders would involve such corporate matters as only SEC can
resolve in the exercise of its quasi-judicial powers.

3) Here, the claim for separation pay and unpaid wages involves a labor dispute. It does not
involve an intra-corporate matter, even when it is between a stockholder and a corporation. It
relates to an employer-employee relationship, distinct from the corporate relationship of one
with the other.

Likewise, there is no showing of any change of duties performed by Movilla as Administrative

Officer and Administrative Manager after his election as such. What is important is whether
there was a change in the nature of his functions and not merely the nomenclature or title of his
job. Movilla worked as administrative officer for several years and was registered with SSS. His
registration in SSS by Mainland added strength to the conclusion that he was petitioner
corporation’s employee as coverage by said law is predicated on existence of an employer-
employee relationship.

4) Existence of employer-employee relationship is a factual question and NLRC’s findings are

accorded great weight and respect as the same are supported by substantial evidence.

5) Mainland is not prohibited from hiring its corporate officers to perform services under a
circumstance which will make him an employee.

Thus, NLRC has jurisdiction over the labor dispute under Art. 217 of the Labor Code.

4. Tabang v. NLRC, GR 121143, January 21, 1997, Regalado, J., Second Division. (If the
dispute is between the corporation and a corporate officer whose office is created by the
corporation’s by-laws or (this second part is mere obiter as held in Matling v. Coros)
pursuant to the Board’s power in the by-laws to create such office and appoint an officer
therefor, the dispute is intra-corporate within SEC’s jurisdiction.)
FACTS:
Tabang was a founding member, a member of the Board of Trustees, and the corporate secretary
of private respondent Pamana Golden Care Medical Center Foundation, Inc. the BoT issued a
memorandum, appointing Tabang as medical director and hospital administrator of PGCMC in
Calamba, Laguna. Tabang claims that she received a monthly retainer fee of P5kj from
PGCMCF, but which was allegedly stopped. Later, Tabang was allegedly informed that in a
meeting, the BoT passed a resolution relieving her of her position as medical director and
hospital administrator.

Tabang thus filed a complaint for illegal dismissal and non-payment of wages, allowances, 13th
month pay, before the LA. PGCMCF moved for dismissal on the ground of lack of jurisdiction,
arguing that Tabang’s position was interlinked with her position as BoT member, thus the
dismissal is an intra-corporate dispute under the jurisdiction of SEC. LA dismissed the
complaint, ruling that the case falls within the jurisdiction of SEC under S5, PD 902-A. NLRC
affirmed. Hence this petition.

ISSUE:
Whether Tabang’s dismissal, where her position was medical director and hospital administrator,
given to her due to her membership in the Board of Trustees, involves intra-corporate dispute.
HELD:YES.
1) A medical director and hospital administrator are considered as corporate officers under the
BY-LAWS of PGCMCF. Section 2(i), Article I thereof states that one of the powers of the
Board of Trustees is "(t)o appoint a Medical Director, Comptroller/Administrator, Chiefs of
Services and such other officers as it may deem necessary and prescribe their powers and
duties." 

The president, VP, secretary, and treasurer are commonly regarded as the executive officers of a
corporation. But other offices, sometimes created by the charter or by-laws of a corporation,
or the board of directors may be empowered under the by-laws of a corporation to create
additional offices as may be necessary.

An “office” is created by the CHARTER of the corporation and the officer is ELECTED by the
directors/stockholders. An “employee” usually occupies no office and is employed not by action
of the directors/stockholders but by the managing officer of the corporation who determines
the employee’s compensation.

2) Here, since Tabang, unlike an ordinary employee, was appointed by PGCMCF’s Board of
Trustees, she is deemed an officer of the corporation. S5(c) of PD 902-A applies (SEC exercises
exclusive jurisdiction over controversies in the election or appointment of directors, trustees,
officers or managers of corporations, partnerships or associations).

3) Also, an intra-corporate controversy is one which arises between a stockholder and the
corporation. There is no distinction, qualification, nor any exemption whatsoever. The provision
is broad and covers all kinds of controversies between stockholders and corporations. (*Held in
Matling v. Coros as not controlling as this statement is too sweeping. In Matling, SC adopted
the “better policy” in Mainland v. Movilla.)

4) The P5k retainer fee is paid by Pamana Inc. a distinct corporation from private respondent
PGCMCF. But even assuming that the monthly payment of P5k is a valid claim against
PGCMCF, this does not remove the case from SEC’s jurisdiction. In Cagayan de Oro Coliseum
v. Minister of Labor, SC held that “(a)lthough the reliefs sought by Chavez appear to fall under
the jurisdiction of the labor arbiter as they are claims for unpaid salaries and other remuneration
for services rendered, a close scrutiny thereof shows that said claims are actually part of the
perquisites of his position in, and therefore interlinked with, his relations with the
corporation.

5. Matling Industrial and Commercial Corporation v. Coros, GR 157802, October 13, 2010,
Bersamin, J., Third Division. (Corporate officers are only 1) those stated in S25 of
Corporation Code [president, secretary, treasurer] and 2) other offices created by the
bylaws of a corporation; Tabang abandoned; “Better policy” in Mainland v. Movilla
adopted, Tabang’s sweeping pronouncement abandoned also; Length of service a factor in
determining if one is employee or corporate officer)
FACTS:
Coros was dismissed by Matling as its Vice President for Finance and Administration (VPFA).
Coros filed a complaint for illegal dismissal against Matling in the NLRC. Matling moved to
dismiss on the ground that jurisdiction was with SEC due to the controversy being intra-
corporate, as Coros was a member of Matling’s Board of Directors aside from being VPFA. LA
dismissed the petition, ruling that Coros was a corporate officer as she was occupying the
position of VPFA and was also a member of the board of directors. NLRC reversed, ruling that
the illegal dismissal was cognizable by LA, not SEC, since Coros was not a corporate officer, his
position not being listed in the by-laws of Matling. CA affirmed, ruling that the position of
VPFA was created not by the board of directors, but only by the Matling’s president pursuant to
the bylaws of the corporation. Hence this petition

ISSUE:
Whether a position not mentioned in the by-laws of a corporation and is created by the
corporation’s president under its power in the by-laws is a corporate officer, such that
jurisdiction over a dispute between the corporation and the person holding such position is with
the SEC (now RTC).
HELD: NO.
1) Effective August 08, 2000, RA 8799, Securities Regulation Code, SEC’s jurisdiction over all
intra-corporate disputes was transferred to RTC pursuant to S5.2 thereof.

2) Bylaw V of Matling provides:

BY LAW NO. V
Officers
The President shall be the executive head of the corporation; shall preside over the
meetings of the stockholders and directors; shall countersign all certificates, contracts and
other instruments of the corporation as authorized by the Board of Directors; shall have
full power to hire and discharge any or all employees of the corporation; shall have full
power to create new offices and to appoint the officers thereto as he may deem proper
and necessary in the operations of the corporation and as the progress of the business and
welfare of the corporation may demand; shall make reports to the directors and
stockholders and perform all such other duties and functions as are incident to his office
or are properly required of him by the Board of Directors. In case of the absence or
disability of the President, the Executive Vice President shall have the power to exercise
his functions.
Petitioners argue that the power to create corporate office was delegated by Matling’s board of
directors to its president thru ByLaw V. Thus, the positions created by its president is as valid as
that which is created by its board, making the office a corporate office. Matling cites Tabang v.
NLRC, which held that offices created by the bylaws or by the board of directors under a power
under the bylaws of a corporation are corporate offices. Coros counters that Matling’s bylaws did
not list his position as VPFA as one of the corporate offices.

3) We agree with Coros. S25 of the Corporation Code provides:

Section 25. Corporate officers, quorum.--Immediately after their election, the directors of
a corporation must formally organize by the election of a president, who shall be a
director, a treasurer who may or may not be a director, a secretary who shall be a resident
and citizen of the Philippines, and such other officers as may be provided for in the
 by-laws. Any two (2) or more positions may be held concurrently by the same person,
except that no one shall act as president and secretary or as president and treasurer at the
same time.
Thus, a position must be expressly mentioned in the bylaws to be considered a corporate
office. Thus, the creation of an office pursuant to a bylaw enabling provision is NOT
ENOUGH to make a position a corporate office. The only corporate officers were those given
that character either by the CORPORATION CODE or the BYLAWS; the rest of the
corporate officers could only be considered employees or subordinate officials. Under S25, the
corporate officers are the president, Secretary, Treasurer, and such other officers as may be
provided for in the by-laws. A different interpretation can leave the way for the board of
directors to circumvent security of tenure by including in the by-laws an enabling clause on the
creation of just any corporate officer position.

4) The Board of Directors of Matling could not validly delegate the power to create a
corporate office to its president in light of S25, Corporation Code, which requires the
Board to elect the corporate officers. The power to elect was exclusively vested in the Board
and could not be delegate to subordinate officers. The office of VPFA, created by Matling’s
president pursuant to By Law No. V, was an ordinary, not a corporate, office. The power to
create new offices in ByLawV only allowed Matling’s president to create non-corporate offices.

5) Matling’s reliance on Tabang is misplaced. The statement in Tabang that officers not
expressly mentioned in the By-Laws but were created pursuant to a By-Law enabling provision
were also considered corporate offices, was plainly obiter dictum due to the position subject of
the controversy being mentioned in the By-Laws. Tabang and Nacpil v. Intercontinental
Broadcasting, which relied on Tabang, should no longer be controlling.

6) Respondent’s status as director and stockholder did not automatically convert his dismissal
into an intra-corporate dispute. True, it is stated in Tabang that “an intra-corporate controversy is
one which arises between a stockholder and the corporation. There is no distinction, qualification
or any exemption whatsoever. The provision is broad and covers all kinds of controversies
between stockholders and corporations.” But this pronouncement is NOT CONTROLLING
because it is too sweeping and does not accord with reason, justice, and fair play. To
determine if a dispute is intra-corporate or not, the Court instead considers 2 elements: (a) the
status or relationship of the parties; and (b) the nature of the question that is the subject of
their controversy. 

7) In Mainland Construction v. Movilla, it was held:

The fact that the parties involved in the controversy are all stockholders or that the parties
involved are the stockholders and the corporation does not necessarily place the dispute
within the ambit of the jurisdiction of SEC. The better policy to be followed in
determining jurisdiction over a case should be to consider concurrent factors such as the
status or relationship of the parties or the nature of the question that is the subject of
their controversy. In the absence of any one of these factors, the SEC will not have
jurisdiction. Furthermore, it does not necessarily follow that every conflict between the
corporation and its stockholders would involve such corporate matters as only the SEC
can resolve in the exercise of its adjudicatory or quasi-judicial powers
8) The criteria for distinguishing between corporate officers who may be ousted from office at
will, on one hand, and ordinary corporate employees who may only be terminated for just cause,
on the other hand, do not depend on the nature of the services performed, but on the manner of
CREATION of the office.

Coros was not appointed VPFA because of his being stockholder or director. He had been
employed for 33 years until his termination, first as bookkeeper, then to his last position as
VPFA. Even though he became stockholder, his promotion to VPFA was by virtue of the length
of quality of service he rendered as employee of Matling.

In Prudential Bank and Trust Company v. Reyes, cra1aw a case involving a lady bank manager
who had risen from the ranks but was dismissed, the Court held that her complaint for illegal
dismissal was correctly brought to the NLRC, because she was deemed a regular employee of the
bank. It was held that: The banks contention that she merely holds an elective position and that in
effect she is not a regular employee is belied by the nature of her work and her length of
service with the Bank.

6. Prudential Bank and Trust Company v. Reyes, GR 141093, February 20, 2001, Gonzaga-
Reyes, J., Third Division. (When a party actively participates in the proceedings in the LA,
NLRC, and CA, raising for the first time the issue of lack of jurisdiction only on appeal to
NLRC, the party is estopped from questioning jurisdiction.)
FACTS:
Prudential Bank’s auditors discovered that 2 HSBC checks ($224,650) received by the bank on
April 06, 1989 drawn in favor of Filipinas Tyrom were not sent out for collection/clearing. The
bank created a committee to investigate the findings.

The Committee found:

That the 2 checks were received by the Foreign Department, of which respondent Clarita Tan
Reyes is the Assistant Vice President, on April 06, 1989. Reyes authorized the crediting of the
account of Tyrom for P44M. Ms. Joven, remittance clerk in the foreign department, prepared a
transmittal letter to send out the 2 checks for collection. Joven requested Reyes to sign the
transmittal letters, but Reyes told Joven to just hold on to the letters and checks and await further
instructions. When Ms. Castillo asked about the 2 HSBC checks, Joven relayed to her Reyes’
instruction. 15 months later, the 2 checks were discovered in the course of audit. Atty. Magno,
the Bank’s legal counsel, advised complainant to send the checks for collection despite lapse of
15 months. Reyes deliberately withheld Magno’s advise from her superior, Senior VP Santos and
falsely informed Santos that Magno advised instead that a demand letter be sent. The HSBC
checks were finally sent on July 10, 1990, but these were returned for “account closed.”

After reviewing the committee’s findings, the board of directors resolved not to re-elect Reyes
anymore to the position of assistant president. Reyes was then informed of her termination of
employment in a letter.

Reyes filed a petition for illegal dismissal with damages etc. LA ruled that the dismissal is
without factual and legal basis as Prudential Bank failed to prove the committee findings. The
Bank appealed to NLRC, which reversed LA. CA reversed NLRC, finding that there was illegal
dismissal. Hence this petition.

PB raised the issue of lack of jurisdiction for the first time on appeal to NLRC, arguing that the
case was an intra-corporate dispute.

ISSUE:
Whether the Bank may still raise the issue of jurisdiction for the first time in the NLRC after it
participated in the proceedings actively.
HELD: NO.
1) PB argues that the dispute is intra-corporate, concerning the non-election of Reyes as AVP
which falls under the jurisdiction of the SEC (now RTC) under S5, PD 902-A. PB claims that
Reyes is a corporate officer, an elective position under the by-laws.

2) But PB can no longer raise the issue of jurisdiction under the principle of ESTOPPEL. PB
participated in the proceedings from start to finish. It filed its position paper with LA. When the
LA decision was adverse, PB appealed to NLRC. When the NLRC decided in its favor, the bank
said nothing about jurisdiction. Even before the Court of Appeals, it never questioned the
proceedings on the ground of lack of jurisdiction. It was only when the Court of Appeals ruled in
favor of private respondent did it raise the issue of jurisdiction. The Bank actively participated
in the proceedings before the Labor Arbiter, the NLRC and the Court of Appeals. While it is true
that jurisdiction over the subject matter of a case may be raised at any time of the proceedings,
this rule presupposes that laches or estoppel has not supervened.

This Court has frowned upon the undesirable practice of a party submitting his case for decision
and then accepting the judgment only if favorable, and attacking it for lack of jurisdiction when
adverse.

3) Reyes was appointed accounting clerk in 1963. She rose to become supervisor. In 1982, she
was appointed AVP until her illegal dismissal in 1991. PB’s claim that she merely holds an
elective position and that she is not a regular employee is belied by the nature of her work and
the length of service with PB since 1963 until 1991. As AVP of the foreign department of PB,
she is tasked to collect checks drawn against overseas banks payable in foreign currency. The
primary standard of determining regular employment is the reasonable connection between
the activity performed by the employee in relation to the usual trade or business of the employer.
Thus, as regular employee, she is entitled to security of tenure.

4) SC ruled that PB failed to prove the basis of the dismissal since PB relied on the testimony
of ?Joven. but Joven’s allegations fall short of the requisite proof to warrant Reyes’ dismissal.
Except for Joven’s bare assertion to withhold the checks per Reyes’ instructions, PB failed to
adduce convincing evidence to prove bad faith.

7, Pepsi-Cola Bottling Company v. Hon. Martinez, GR L-58877, March 15, 1982, Escolin,
J., Second Division.
FACTS:
Respondent Abraham Tumala filed a complaint in CFI against Pepsi et al. he claims that he was
a salesman from 1977 to 1980. In an annual “Sjmakwel” contest in 1979, Tumala was declared
the winner of “Lapulapu Award” for his performance as top salesman of the year, an award
which entitled him to a prize of a house and lot. Despite demands, Pepsi failed to deliver the
prize. Then later, Tumala alleges that he was arbitrarily and illegally dismissed. He prayed that
petitioners jointly and severally deliver his prize of house and lot or its cash equivalent, pay
his back salaries, damages, litigation expenses. He did not ask for reinstatement.

Pepsi moved to dismiss on the ground of lack of jurisdiction and cause of action. It claims that
Tumala is not entitled to the prize for misleading the company into declaring him top salesman.

ISSUE:
Which tribunal has exclusive jurisdiction over an action filed by an employee against his
employer for recovery of unpaid salaries, separation benefits, and damages- courts of general
jurisdiction or the LA of the NLRC?
HELD: LA.
1) Art. 217 of the Labor Code was amended by PD 1367 on May 1, 1978:
SECTION 1. Paragraph [a] of Art, 217 of the Labor Code as amended is hereby further
amended to read as follows: 
[a] The Labor Arbiters shall have exclusive jurisdiction hear and decide the following
cases involving all workers, whether agricultural or non-agricultural: 
1] Unfair labor practice cases; 
2] Unresolved issues in collective bargaining, including those which involve wages,
hours of work, and other terms conditions of employment; and 
3] All other cases arising from employer-employee relations duly indorsed by the
Regional Directors in accordance with the provisions of this Code. 
Provided, that the Regional Directors shall not indorse and Labor Arbiters shall not
entertain claims for moral or other forms of damages.
Paragraphs 3 and 5 of Art. 217 were deleted. The last paragraph was a new provision. Thus, this
amendatory act divested Las of competence to pass upon claims for damages by employees
against their employers.

2) But on May 1, 1980, Art. 217 was amended anew by PD 1691. PD 1691 is a verbatim
reproduction of the original text of Art. 217 of LC and restored to the LAs of NLRC exclusive
jurisdiction over claims, money or otherwise, arising from employer-employee relations:
SEC. 3. Article 217, 222 and 262 of Book V of the Labor Code are hereby amended to read as
follows: 
Article 217. Jurisdiction of Labor Arbiters and the Commission. — The Labor Arbiters
shall have the original and exclusive jurisdiction to hear and decide the following cases
involving all workers, whether agricultural or non-agricultural: 
1. Unfair labor practice cases; 
2. Unresolved issues in collective bargaining, including those that involve waged hours of
work and other terms and conditions of employment; 
3. All money claims of workers, including those based on non-payment or
underpayment of wages, overtime compensation, separation pay and other benefits
 provided by law or appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity benefits; 
4. Cases involving household services; and 
5. All other claims arising from employer-employee relations, unless expressly
excluded by this Code.

Under paragraphs 3 and 5, this case is exclusively cognizble by LAs of NLRC. In Garcia v.
Martinez, it was held that paragraphs 3 and 5 are broad and comprehensive enough to cover the
employee’s claim for damages arising from his unjustified dismissal by the employer.

3) Tumala claims that the action for delivery of house and lot is a civil controversy exclusively
triable by courts of general jurisdiction. But the claim for prize arose from employer-employee
relation and thus falls under par.5 of Art. 217. Indeed, Tumala would not have been qualified for
the contest were he not an employee.

8. San Miguel Corporation v. NLRC, GR 80774, May 31, 1988, Feliciano, J., Third
Division. (The LAs have no jurisdiction over money claims arising out of employer-
employee relations but which claims may be resolved without reference to Labor Code
provisions.)
FACTS:
SMC sponsored an innovation program under which SMC undertook to grant cash awards to all
SMC employees who submit to SMC suggestions found beneficial to the corporation. Private
respondent Rustico Vega submitted an innovation proposal called “Modified Grande
Pasteurization Process.” SMC did not find this proposal acceptable and refused Vega’s demands
for the cash award. Thus, Vega filed a complaint against SMC with the RAB of the then Ministry
of Labor and Employment.

LA held that it had no jurisdiction since the money claim is not an incident of employment.
NLRC reversed, ordering SMC to pay Vega P60k (the maximum cash award). Hence this
petition for certiorari.

ISSUE:
Whether the LAs have jurisdiction over money claims arising out of employer-employee
relationship but the resolution of which do not require reference to the Labor Code.
HELD: NO.
1) The jurisdiction of LAs and NLRC is outlined in Art. 217 of the Labor Code, as last amended
by BP 227, which took effect June 1, 1982:
RT. 217. Jurisdiction of Labor Arbiters and the commission. (a) The Labor Arbiters shall
have the original and exclusive jurisdiction to hear and decide within thirty (30) working
days after submission of the case by the parties for decision, the following cases
involving are workers, whether agricultural or non-agricultural: 
1. Unfair labor practice cases; 
2. Those that workers may file involving wages, hours of work and other terms and
conditions of employment; 
3. All money claims of workers, including those based on non-payment or
underpayment of wages, overtime compensation, separation pay and other benefits
 provided by law or appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity benefits; 
4. Cases involving household services; and 
5. Cases arising from any violation of Article 265 of this; Code, including questions
involving the legality of strikes and lockouts. 
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by
Labor Arbiters.
1.1) Not all money claims in the universe that might be asserted by workers against employers
are absorbed into the jurisdiction of LAs (Even if “all money claims of workers). Par. 3 should
be read not in isolation but from the context formed by paragraphs 1, 2, 4, and 5. There is a
unifying element thru paragraphs 1 to 5 and that is that they all refer to cases or disputes arising
out of or in connection with an employer-employee relationship. Noscitur a sociis may be
usefully invoked in clarifying the scope of Par. 3.

This conclusion is from an examination of the terms of Art. 217 as amended by BP 227, even
though earlier versions of Art. 217 of LC brought within the jurisdiction of LAs and the
NLRC “cases arising from employer-employee relations,” which clause was not expressly
carried over in Art. 217 today. It cannot be presumed that money claims of workers not arising
out of employer-employee relationship, and which should fall within the general jurisdiction of
regular courts, were intended by the legislative authority to be taken away from the jurisdiction
of courts and lodged with LAs.

Thus, Par. 3’s “money claims of workers” embraces money claims which arise out of or in
connection with the employer-employee relationship or some aspect of such relationship.

1.2) The innovation program here is an employee incentive scheme offered only to employees of
SMC. Without the EEW relationship, there would have been no occasion to consider Vega’s
innovation.

2) However, although a controversy is between an employer and employee, the LAs have no
jurisdiction if the Labor Code is not involved. In Singapore Airlines Limited v. Paño, it was
held that petitioner therein seeks protection under civil laws and claims no benefits under the
Labor Code. The primary relief sought is for damages for breach of contract. The other items
demanded are not labor benefits but arise from breach of an obligation, intrinsically a civil
dispute. Where the cause of action was one under civil laws and there is no breach of any
provision of the Labor Code, or employment contract, civil courts, not LAs and nlrc, have
jurisdiction.

Here, SMC’s innovation program was an invitation by SMC to its employees to submit
innovations undertaking to grant cash awards to employees whose suggestions benefit SMC.
This undertaking could ripen into an enforceable contractual (facio ut des) obligation of SMC.
Thus, whether an enforceable innominate contract had arisen between SMC and Vega and if it
had been breached are legal questions to be resolved not be referring to labor legislation
having nothing to do with wages and terms of employment, but rather having recourse to
our law on contracts.
9. PNB v. Cabansag, GR 157010, June 21, 2005, Panganiban, J., Third Division.
FACTS:
Florence Cabansag arrived in Singapore as tourist. She was employed with the Singapore Branch
of PNB, headed by Ruben Tobias as general manager. The bank president, impressed by
Cabansag’s credentials, approved the recommendation of Tobias. Cabansag applied for and then
was granted an employment pass with the ministry of manpower of SG.

On Dec. 7, 1998, Tobias wrote a letter to Cabansag, offering a temporary appointment as credit
officer where Cabansag would be under probation for 3 months among other conditions.
Cabansag accepted and assumed office. After 3 months in office, Cabansag submitted a
performance report to Tobias, who was so impressed that he noted thereon “GOOD WORK.”

However, later, he was told by the branch AVP that Tobias told the AVP to tell Cabansag to
resign. Perplexed, Cabansag asked Tobias, who confirmed that Cabansag, explaining that her
resignation was imperative as a “cost-cutting measure.” Cabansag asked to be furnished a formal
advice from the PNB head office in Manila, which Tobias flatly refused. Cabansag did not
submit a resignation letter.

On April 16, 1999, Tobias summoned Cabansag again to his office and demanded she resign,
under the pretext that he needed a Chinese-speaking credit officer, else her record will be
blemished with the notation “DISMISSED.” On April 19, 1999, Cabansag was summoned again
and ordered to submit her resignation. She refused. Thus, on April 20, 1999, Cabansag received a
letter from Tobias terminating her employment with PNB.

LA ruled in favor of Cabansag. NLRC affirmed. CA ruled that PNB failed to establish just cause
for Cabansag’s dismissal. Hence this petition.

ISSUE:
Whether PH laws apply to the controversy where Cabansag was employed in SG and granted an
OEC by POEA.
HELD: YES.
1) The jurisdiction of LAs and the NLRC is specified under Art. 217 of LC:
"ART. 217. Jurisdiction of Labor Arbiters and the Commission. – (a) Except as otherwise
provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction
to hear and decide, within thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wage, rates of pay, hours of work and other terms and conditions of
employment
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts; and
 6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims, arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount of exceeding five
thousand pesos (₱5,000.00) regardless of whether accompanied with a claim for
reinstatement.
(b) The commission shall have exclusive appellate jurisdiction over all cases decided by
Labor Arbiters.
More specifically, S10, RA 8042 states:
SECTION 10. Money Claims. — Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days
after the filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages.
Thus, LAs have original and exclusive jurisdiction over claims arising from EE relations,
including termination disputes involving all workers, among whom are OFWs.

2) Cabansag applied for and secured an OEC from POEA thru the PH Embassy in SG, declaring
her a bona fide contract worker for SG. Thus, even assuming arguendo that she was at the start
considered a “direct hire” governed by the laws of SG, she later became an OFW covered by PH
Labor Laws upon certification by POEA. When her employment was illegally terminated, she
already possessed the POEA certificate.

PNB also admits that it is a PH corporation doing business thru a branch office in SG. This
militates against PNB’s contention that Cabansag was “locally hired” and governed by SG laws,
not of PH. Instead, this reinfordes the presumption that Cabansag is a migrant worker deployed
in SG. Thus, PNB cannot escape application of PH laws or the jurisdiction of NLRC and the
LA.

3) Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of
Philippine labor and social legislation, contract stipulations to the contrary
notwithstanding. Under Art. 17 of NCC, laws ‘which have for their object public order, public
policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or
by determination or conventions agreed upon in a foreign country.’"

4) As to Venue, S1(a) of Rule IV of the NLRC Rules of Procedure reads:

"Section 1. Venue – (a) All cases which Labor Arbiters have authority to hear and decide
may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of
the complainant/petitioner; Provided, however that cases of Overseas Filipino Worker
(OFW) shall be filed before the Regional Arbitration Branch where the complainant
resides or where the principal office of the respondent/employer is situated, at the option
of the complainant
A migrant worker is a person who is to be engaged xxx in a remunerated activity in a state of
which he or she is not a legal resident. Cabansag is an OFW as she was employed in SG and not
a legal resident of SG. Thus, she has the option of venue 1) RAB where she resides or 2) RAB
where the principal office of her employer is situated. Cabansag resides in QC. Thus, her filing
of the complaint in the QC RAB is a valid choice of proper venue.

10. Santiago v. CF Sharp Crew Management, Inc., GR 162419, July 10, 2007, Tinga, J.,
Second Division.
FACTS:
Paul Santiago had been working as seafarer for Smith Bell Management, respondent, for 5 years.
Santiago signed a new contract of employment with respondent for 9 months. POEA approved
the contract. Santiago was to be deployed on board MSV Seaspread. But a week before departure
to Canada, respondent’s VP, Fernandez, sent a facsimile to the captain of MSV Seaspread,
saying that Fernandez had received a call from the wife of Santiago asking not to send Santiago
to MSV Seaspread anymore. Other callers also said that Santiago would jump ship like his
brother. Thus, the Santiago was later told that he would not be leaving for Canada anymore but
was reassured that he might be considered for deployment again in the future.

Santiago filed a complaint for illegal dismissal, damages, attorney’s fees against respondent. LA
ruled that there was no EE relation since the contract had not commenced, Santiago not being
deployed. But LA granted 9 months salary. NLRC vacated the award. CA ruled that there is no
EE Relationship and that the non-deployment was a valid exercise of management prerogative.
Hence this petition.

ISSUE:
Whether LA has jurisdiction over a claim of illegal dismissal by a seafarer despite absence of EE
relationship.
HELD: YES.
1) The parties entered into an employment contract where Santiago was to render services on
board Seaspred for 9 months plus overtime pay. But there was failure to deploy, thus the
employment contract did not commence, and no EE relationship was created (S2 of POEA
standard contract, “employment contract xxx shall commence upon actual departure xxx.”).

2) But distinction must be made between perfection of employment contract and

commencement of EE relationship. The perfection of the contract occurred when petitioner and
respondent agreed on the object and cause, and terms of the contract. The commence of EE
relation would have taken place if Santiago was deployed from the point of hire. Thus, even
before the start of EE relationship, there are certain rights and obligations the breach of
which may give rise to a cause of action against the erring party. If the reverse happened, i.e.
the seafarer refused to be deployed as agreed upon, he would be liable for damages.

Respondent’s act of preventing Santiago from departing is a breach of contract.

3) Despite absence of EE relationship, NLRC has jurisdiction. The jurisdiction of LAs is not
limited to claims arising from EE relationships. S10 of RA 8042 states:
Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing
of the complaint, the claims arising out of an employer-employee relationship or by
 virtue of any law or contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms of damages.
Since this petition involves the employment contract entered into by Santiago for overseas
employment, his claims are cognizable by LAs of NLRC.

4) SC held that respondent must pay Santiago 9 months worth of salary but not overtime pay.
Even if the contract had a fixed overtime pay, it is not a guarantee that he would receive said
amount. The contract provision guarantees overtime pay but the entitlement to such benefit must
first be established. A seaman, by the nature of his job, stays on board a ship beyind the regular
8-hour work schedule.

11. PAL v. NLRC, GR 120567, March 20, 1998, Martinez, J., Second Division. (NLRC’s
original jurisdiction to issue injunction is limited to cases where a labor dispute is pending
with the LA.)
FACTS:
Private respondents Pineda and Cabling are flight stewards of petitioner. Both were dismissed
from service for their alleged involvement in the April 03, 1993 currency smuggling in HK.
They filed with NLRC a petition for injunction praying for a TRO or for them to be reinstated
temporarily while a hearing on the propriety of issuance of a writ of PI is being undertaken etc.
NLRC issued a temporary mandatory injunction, enjoining PAL to cease from enforcing its
memorandum of dismissal.

NLRC ruled that it is empowered under Art. 218€ of the LC not only to restrain any actual or
threatened commission of prohibited acts but also to require performance of a particular act in
any labor dispute which if not restrained may cause grave damage to any party. NLRC denied
PAL’s MR, ruling that, as to PAL’s argument that the remedy is to file an illegal dismissal case
against PAL, NLRC said this argument is ignorant. The condition that “complainant has no
adequate remedy at law” in Art. 218(e)(4) refers to adequacy, not availability of a remedy at law
as alternative to issuance of injunction. An illegal dismissal suit would take 3 years at least, and
thus is not an adequate remedy.

Hence this petition.

ISSUE:
Whether NLRC has jurisdiction over a petition for injunction filed directly with it even without a
case pending with the labor arbiter.
HELD: NO.
1) Art. 218 (e) of LC empowers NLRC:
"(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or
unlawful acts or to require the performance of a particular act in any labor dispute
which, if not restrained or performed forthwith, may cause grave or irreparable damage to
any party or render ineffectual any decision in favor of such party; x x x." 
S1, Rule XI of the New Rules of Procedure of NLRC provides:
"Section 1. Injunction in Ordinary Labor Dispute.-A preliminary injunction or a
restraining order may be granted by the Commission through its divisions pursuant to the
provisions of paragraph (e) of Article 218 of the Labor Code, as amended, when it is
 established on the bases of the sworn allegations in the petition that the acts complained
of, involving or arising from any labor dispute before the Commission, which, if not
restrained or performed forthwith, may cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such party.
Thus, NLRC’s power to issue injunctive writ originates from “any labor dispute”.

2) "Labor dispute" is defined as "any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing, maintaining,
changing, or arranging the terms and conditions of employment regardless of whether or not the
disputants stand in the proximate relation of employers and employees."

“Controversy” is defined as a “litigated question; adversary proceeding in a court of law; a

civli action or suit, either at law or in equity; a justiciable dispute.”

A "justiciable controversy" is "one involving an active antagonistic assertion of a legal right on

one side and a denial thereof on the other concerning a real, and not a mere theoretical question
or issue."

Thus, there must first be a labor dispute between the parties BEFORE THE LABOR
ARBITER. Here, there is no labor dispute as there has yet been no complaint for illegal
dismissal filed with LA.

3) The petition for injunction directly filed in NLRC is in reality an action for illegal dismissal.
This is clear from the allegations in the petition praying for reinstatement, backwages, damages.
The jurisdiction conferred to the LA in Art 217 of LC is both original and exclusive, meaning no
other officer or tribunal can take cognizance of, hear and decide any of the cases therein
enumerated. The only exceptions are where Sec. of Labor exercises the power of compulsory
arbitration, or the parties agree to submit the matter to voluntary arbitration under Art. 263(g).

On the other hand, NLRC has exclusive appellate jurisdiction over all cases decided by LAs as
provided in Art. 217(b). NLRC’s jurisdiction in illegal dismissal cases is appellate in nature.

4) Where the remedy is provided by law, it is presumed adequate.

5) Also, the injunction has no basis since there is no showing of any urgency or irreparable injury
which respondents might suffer. It is considered irreparable injury when it cannot be adequately
compensated in damages due to the nature of the injury itself or the nature of the right or
property injured or when there exists no certain pecuniary standard for the measurement of
damages. Here, the injury from the alleged illegal dismissal can be adequately compensated.

12. Halagueña v. PAL, GR 172013, October 02, 2009, Peralta, J., Third Division.
FACTS:
Petitioners were employed as female flight attendants of PAL on different dates prior to Nov. 22,
1996. They are members of Flight Attendants and Stewards Association of PHL (FASAP), sole
bargaining representative of the flight attendants. PAL nad FASAP entered into a CBA. S144
thereof states:
 A. For the Cabin Attendants hired before 22 November 1996:
xxxx
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 this provision is discriminatory and
demanded equal treatment with their male counterparts. Petitioners filed a petition for
declaratory relief with prayer for WPI in RTC. RTC issued an order upholding its jurisdiction.
RTC issued a TRO enjoining implementation of S144. RTC then issued a WPI. CA ruled that
RTC had no jurisdiction since this is a labor dispute and annulled its decision. Hence this
petition.

ISSUE:
Whether the courts have jurisdiction over the petition.
HELD: YES.
1) The allegations in the petition for declaratory relief show that petitioners’ cause of action is
the annulment of S144 of the PAL-FASAP CBA. The issue raised is whether S144 is unlawful
and unconstitutional for allegedly discriminating against them for being female flight attendants.
The subject of litigation is incapable of pecuniary estimation cognizable by RTC.

2) The issue cannot be resolved solely by applying the Labor Code. Rather, it requires the
application of the constitution, labor statues, law on contracts, and CEDAW and the power to
interpret the constitution and CEDAW is within the jurisdiction of trial courts. The jurisdiction
of LA and NLRC under Art. 217 of LC is limited to disputes arising from EE relationship which
can only be resolved by reference to the Labor Code, other labor statues, or their CBA. The
EE relationship in this case is merely incidental and the cause of action ultimately arose from
different sources of obligation- the constitution and CEDAW.

Thus, where the principal relief sought is to be resolved not by reference to the LC or other labor
relations statute or CBA but by the general civil law, the courts have jurisdiction. In such cases,
resolution of the dispute requires expertise not in labor management relations but rather in the
application of the general civil law.

3) Referral to the grievance machinery in the CBA and thereafter to voluntary arbitration would
be inappropriate to petitioners because the union and management have unanimously agreed
to the terms of CBA and their interest is unified. Only disputes involving the union and
company shall be referred to the grievance machinery or voluntary arbitrators. Where the
union and the company are united, there is no grievance between them which could be brought to
a grievance machinery. It cannot be said that the dispute in this case is between the union
FASAP and PAL because both have agreed on the compulsory retirement of female flight
attendants. Thus, referral to the grievance machinery and voluntary arbitration would not serve
the interest of petitioners.

13. Jaguar Security and Investigation Agency v. Sales, GR 162420, April 22, 2008, Austria-
Martinez, J., Third division.
FACTS:
Jaguar Security Investigation is a corporation engaged in providing security services to clients,
including Delta Milling Industries. Private respondent Sales, Tamayo, Caranyagan, Silva,
Moron, and Fetalvero were hired as security guards by Jaguar. They were assigned at the
premises of Delta in QC. Caranyagan and Tamayo were terminated by Jaguar. All of them claim
monetary benefits such as underpayment, holiday premium pay, 14th month pay, SIL etc.
Caranyagan and Tamayo are that they are entitled to backwages and separation pay.

Respondent security guards instituted the instant case before LA. LA ruled in favor of
respondents. Jaguar filed a partial appeal for failure of NLRC to resolve its cross-claim against
Delta as the party ultimately liable for payment of the monetary award to the security guards.
NLRC dismissed the appeal. CA dismissed the petition. Hence this petition.

ISSUE:
Whether LA has jurisdiction to rule on the cross-claim of Jaguar, direct employer-contractor,
against Delta, indirect employer, for the monetary awards of the employees.
HELD: NO.
1) In Arts. 106, 107, 109 of LC, the joint and several liability of the contractor and principal is
mandated. In the event petitioner pays his obligation to the guard employees, it has the right of
reimbursement from Delta Milling under Art. 1217 of NCC. May Jaguar claim reimbursement
thru a cross-claim filed with the labor court? No. The action is within the realm of civil law.
Hence, jurisdiction belongs to the regular courts. While the resolution of the issue involves
application of labor laws, reference to the LC was only to determine solidary liability of Jaguar
to respondents.

2) The jurisdiction of labor courts extends only to cases where thereis an EE Relationship. Here,
there is no EE relationship between petitioner Jaguar and Delta Milling. In its cross-claim,
petitioner is not seeking any relief under the Labor Code but merely reimbursement of the
monetary benefits claims awarded and to be paid to the guard employees. There is no labor
dispute involved in the cross-claim against Delta Milling. Rather, the cross-claim involves a civil
dispute between petitioner and Delta Milling.

14. 7K Corporation v. Albarico, GR 182295, June 26, 2013, Sereno, CJ., First Division.
(LA’s jurisdiction under Art. 217, while original and exclusive, may be submitted by
agreement of the parties to a voluntary arbitrator)
FACTS:
Eddie Albarico started working for 7K in 1990 as salesman. He was promoted from salesman to
senior sales representative and then to acting team field supervisor. In 1992, he was awarded the
president’s trophy for being one of the company’s top water purifier specialist distributors. But
in April 1993, the COO of 7K terminated Albarico’s employment allegedly for poor sales
performance. Albarico had to stop working and subsequently submitted his money claims
against 7K for arbitration before the National Conciliation and Mediation Board (NCMB).
The issue for arbitration, according to the parties’ submission agreement was whether Albarico
was entitled to payment of separation pay and sales commission.
On November 18, 2005, NCMB voluntary arbitrator found 7K liable for illegal dismissal. The
dismissal was found invalid. NCMB awarded separation pay of P8,912 in lieu of reinstatement.
Also, in view of the finding that Albarico was illegally dismissed, the arbitrator ruled that
Albarico was entitled to backwages of P90,804.

7K imputed to the arbitrator gadalej for awarding backwages and attorney’s fees to Albarico
based on the finding of illegal dismissal, contending that the issue of legality of dismissal was
not explicitly included in the submission agreement filed for voluntary arbitration. But CA
affirmed. Hence this petition.

ISSUE:
Whether NCMB has jurisdiction on the issue of legality of dismissal of Albarico and his
entitlement to backwages even if neither the legality nor entitlement was expressly claimed in the
submission agreement.
HELD: YES.
1) 7K claims that under Art. 217 of LC, original and exclusive jurisdiction over termination
disputes is lodged only with the Labor Arbiters:
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.

a. Except as otherwise provided under this Code, the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days
after the submission of the case by the parties for decision without extension, even in the
absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:

xxxx
2. Termination disputes;
xxxx
6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims arising from employer-employee relations, including those
of persons in domestic or household service, involving an amount exceeding five
thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement. 
But 7K overlooks the proviso “except as otherwise provided under this Code.” Thus, Art. 217
has exceptions. The phrase “except as xxx” refers to the following:
A. Art. 217. Jurisdiction of Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining
agreement and those arising from the interpretation or enforcement of company
procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitrator as may be provided in said agreement.

B. Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all
other labor disputes including unfair labor practices and bargaining deadlocks.
The labor disputes referred to in Art. 262 can include all those disputes mentioned in Art. 217.
Thus, voluntary arbitrators may, by agreement of the parties, assume jurisdiction over a
termination dispute.

2) 7K argues that the arbitrator should have limited his decision to the issue in the submission
agreement of whether Albarico was entitled to separation pay and sales commission.

Under the LC, separation pay may be given not only when there is illegal dismissal. It may be
given to employees terminated for authorized causes in Art. 283. It may also be awarded for
considerations of social justice even if the employee is terminated for a just cause, but only when
there is a finding of valid dismissal for just cause. But these do not obtain in this case. These
indisputably prove that the issue of separation pay emanates solely from Albarico’s allegation of
illegal dismissal. 7K itself acknowledged the issue of illegal dismissal in its position paper to
NCMB.

2.1) Hence, the voluntary arbitrator correctly assumed that the core issue behind the issue of
separation pay is the legality of the dismissal of respondent. Moreover, we have ruled in Sime
Darby Pilipinas, Inc. v. Deputy Administrator Magsalin that a voluntary arbitrator has plenary
jurisdiction and authority to interpret an agreement to arbitrate and to determine the scope of
his own authority when the said agreement is vague — subject only, in a proper case, to
the certiorari jurisdiction of this Court. The issue of legality of dismissal was in fact necessarily,
albeit not explicitly, included in the submission agreement.

15. People’s Broadcasting Service (Bombo Radyo Phils., Inc. v. Secretary of DOLE, GR
179652, March 06, 2012, Velasco, Jr., J., En Banc. (No EER – NLRC; with EER-DOLE)
FACTS:
Respondent Jandeleon Juezan filed a complaint against Bombo Radyo with DOLE Regional
Office Cebu City for illegal deduction, nonpayment of SIL, 13th month pay, holiday and rest day
pay, and illegal diminution of benefits, delayed payment of wages and noncoverage of SSS,
OAGIBIG, and Philhealth. After summary investigations, DOLE Regional Director found that
Juezan was an employee of petitioner and entitled to the money claims. The acting DOLE
Secretary dismissed petitioner’s appeal on the ground that petitioner submitted a deed of
assignment of bacnk deposit instead of posting a cash or surety bond. CA held that petitioner was
not denied due process by this act of the DOLE secretary. SC reversed and set aside CA and the
complaint against petitioner was dismissed.

SC found no EE relationship; that while DOLE may make a determination of the existence of EE
relationship, this function could not be coextensive with the visitorial and enforcemen power
under Art. 128(b) of LC as amended by RA 7730. NLRC was held to be the primary agency to
determine existence of an EE relationship.

PAO filed a motion for clarification of decision. DOLE also sought clarification in its comment.
SC treated the motion as a second motion for reconsideration.

ISSUE:
HELD:
1) Art. 129 of LC on DOLE’s power to hear and decide any matter involving recovery of wages
and other money claims was qualified by the proviso that the complaint not include a claim for
reinstatement or the aggregate money claims not exceed P5k. RA 7730 removed the P5k limit.
The only qualification to the DOLE’s expanded power was only that there still be an existing EE
relationship.

2) It is conceded that if there is no EE relationship, whether terminated or it has not existed from
the start, DOLE has no jurisdiction. Art. 128(b), as amended by RA 7730, reads:
"Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and
in cases where the relationship of employer-employee still exists, the Secretary of Labor
and Employment or his duly authorized representatives shall have the power to issue
compliance orders xxx.”

3) Can DOLE make a determination of EE relationship? Yes. No limitation was placed on

DOLE’s power to determine existence of EE relationship. No procedure was laid down where
DOLE would only make a preliminary finding and that the power was primarily held by NLRC.
DOLE must have power to determine whether EE relationship exists and from there decide
whether to issue compliance orders under Art. 128(b) of LC.

If DOLE makes a finding that there is EE relationship, it takes cognizance of the matter to the
exclusion of NLRC. DOLE would have no jurisdiction only if EE relationship has already
been terminated or there is no EE relationship in the first place. There are judicial remedies,
like Rule 65, on the determination of DOLE. DOLE is empowered to determine existence of EE
relationship in the exercise of its visitorial and enforcement power subject to judicial review,
not review by NLRC.

4) There is a view that despite Art. 128(b) of LC as amended by RA 7730, there is still a
threshold amount set by Arts. 129 and 217 of LC when money claims are involved: 1) If P5k and
below, DOLE Regional Director has jurisdiction in Art. 129 2) if the amount involved exceeds
P5k, jurisdiction is with the labor arbiter under Art. 217. The view states that Art. 128(b) applies
only in the course of regular inspections by DOLE as differentiated from cases in Arts. 129 and
217 which originate from complaints.

But there are several cases where SC ruled that DOLE has jurisdiction despite the amount of
money claims involved. In these cases, the inspection held by DOLE Regional Director was
prompted specifically by complaint. Thus, initiation of a case thru complaitn does not divest
DOLE Secretary or his representative of jurisdiction under Art. 128(b).

5) To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards
provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that
there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the
exclusion of the NLRC. If the DOLE finds that there is no employer-employee relationship, the
jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter,
under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other
terms and conditions of employment, if accompanied by a claim for reinstatement. If a complaint
is filed with the NLRC, and there is still an existing employer-employee relationship, the
jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules of Court.

6) Here, SC found no EE relationship reversing the DOLE Regional Director’s finding of EE

Relationship. Thus, DOLE has no jurisdiction. SC dismissed the complaint against petitioner.

16. Kawachi v. Del Quero, GR 163768. March 27, 2007, Tinga,J., Second Division.
(Reasonable Causal Connection Rule)
FACTS:
On August 14, 2002, Dominie Del Quero charged AJ Raymundo Pawnshop Inc., Virgilio
Kawachi, and petitioner Julius Kawachi with illegal dismissal, non-execution of contract of
employment, violation of minimum wage law, and non-payment of OT pay. This was filed in
NLRC. The complaint alleges that Julius Kawachi scolded Del Quero in front of many people
about the way she treated the customers of the pawnshop and afterwards terminated her
employment without due process.

On November 7, 2002, Del Quero filed an action for damages against petitioners Julius and
Gayle Kawachi in the MeTC, alleging the same incident. She sought moral and exemplary
damages, and attorney’s fees. Petitioners moved to dismiss on the ground of lack of jurisdiction
and forum-shopping. MeTC ruled that no causal connection appeared between Del Quero’s
cause of action and the EE relations between the parties. RTC affirmed. Hence this petition.

ISSUE:
Whether the claim for damages arising from the incident wherein Del Quero was shouted at and
her employment terminated in front of many customers has a causal connection with the EE
relationship of the parties and thus within NLRC’s jurisdiction.
HELD: YES.
1) Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor Arbiter
original and exclusive jurisdiction over claims for damages arising from employer-employee
relations —in other words, the Labor Arbiter has jurisdiction to award not only the reliefs
provided by labor laws, but also damages governed by the Civil Code.

2) Jurisprudence has developed the “reasonable causal connection rule.” Under this rule, if
there is a reasonable causal connection between the claim asserted and the EE relations,
then the case is within the jurisdiction of our labor courts. In the absence of such nexus, it is
the regular courts that have jurisdiction.

3) This rule emerged in the 1987 case of Primero v. IAC where SC recognized LA’s jurisdiction
over claims of damages in connection with termination of employment, thus:
It is clear that the question of the legality of the act of dismissal is intimately related to
the issue of the legality of the manner by which that act of dismissal was performed. But
while the Labor Code treats of the nature of, and the remedy available as regards the first
– the employee’s separation from employment – it does not at all deal with the second –
 the manner of that separation – which is governed exclusively by the Civil Code. In
addressing the first issue, the Labor Arbiter applies the Labor Code; in addressing the
second, the Civil Code. And this appears to be the plain and patent intendment of the law.
For apart from the reliefs expressly set out in the Labor Code flowing from illegal
dismissal from employment, no other damages may be awarded to an illegally dismissed
employee other than those specified by the Civil Code. Hence, the fact that the issue—of
whether or not moral or other damages were suffered by an employee and in the
affirmative, the amount that should properly be awarded to him in the circumstances—is
determined under the provisions of the Civil Code and not the Labor Code, was not
meant to create a cause of action independent of that for illegal dismissal and thus
place the matter beyond the Labor Arbiter’s jurisdiction.

4) Here, the allegations of Del Quero in the damages complaint show that her injury was the
offshoot of petitioners’ immediate harsh reaction as her administrative superiors to the
supposedly sloppy manner by which she discharged her duties. Where the EE relationship is
merely incidental and the cause of action proceeds from a different source of obligation, SC held
that jurisdiction is with the courts. Where the damages claimed for were based on tort, malicious
prosecution, breach of contract, the jurisdiction was held to be with courts. But here, the
allegations of Del Quero unmistakable relate to the manner of her alleged illegal dismissal.

For a single cause of action, the dismissed employee cannot be allowed to sue in 2 forums- one
with LA and the other with courts. Thus, NLRC has jurisdiction over the complaint for illegal
dismissal and damages arising therefrom.

17. Milan v. NLRC, GR 202961, February 04, 2015, Leonen, J., Second Division.
FACTS:
Petitioners are respondent Solid Mills, Inc.’s employees. They are represented by National
Federation of Labor Unions (NAFLU), their collective bargaining agent. As Solid Mills’ (SM)
employees, petitioners and their families were allowed to occupy SMI village, a property owned
by SM out of liberality. Petitioners were informed that effective October 10, 2003, SM would
cease operations due to serious business losses. NAFLU recognized the closure in a MOA, which
provided for SM’s grant of “separation pay less accountabilities, sick leave benefits, VL benefits,
and 13th month pay.” Later, SM sent to petitioners individual notices to vacate SMI village. The
employees of SM were required to sign a MOA with release and quitclaim before their
separation pay etc. would be released. Employees who signed the MOA were considered to have
agreed to vacate SMI Village. Petitioners refused to sign the documents and demanded to be paid
their separation pay.

Petitioners filed with LA for non-payment of separation pay etc., arguing that their accrued
benefits and separation pay should not be withheld since their payment is based on company
policy. SM argues that the complaint was premature since petitioners had not vacated the
property. LA ruled for petitioners. NLRC ruled that because of petitioners’ failure to vacate
SM’s property, SM was justified in withholding their benefits and separation pay. CA dismissed
petitioners’ appeal. Hence this petition.

ISSUE:
Whether NLRC has jurisdiction to rule over the rights of the parties to a property, where the
employees refuse to vacate the property the employer gratuitously allowed them to occupy
subject to the condition that the employees would vacate at anytime the employer sees fit, where
the employer has ceased business operations.
HELD: YES.
1) Petitioners argue that SM and NAFLU’s MOA states only that the benefits shall be “less
accountabilities” which should not be interpreted to include their possession. They also claim
that NLRC and CA have no jurisdiction to declare petitioners’ act of withholding possession
illegal since it is the regular courts that have jurisdiction over this issue, being independent
from the issue of payment of benefits.

NLRC has jurisdiction to determine preliminarily the parties’ rights over a property when
necessary to determine an issue related to rights or claims arising from EE Relationship. LA has
original jurisdiction and NLRC appellate over issues involving claims arising from EE relations:
6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims, arising from employer-employee relations
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00), regardless of whether accompanied with
a claim for reinstatement.
1.1) Claims arising from EE relationship are not limited to claims by an employee. Employers
may also have claims against the employee which arise from the same relationship. Art. 217
applies also to employers’ claim for damages arising from a labor issue. As a general rule,
therefore, a claim only needs to be sufficiently connected to the labor issue and must arise
from EE relationship for labor tribunals to have jurisdiction.

Here, SM allowed petitioners to use its property as an act of liberality. It would not have allowed
them to possess had they not been its employees. The return of the properties is an issue that
must be resolved to determine whether benefits can be released immediately. The issue is thus
connected to petitioners’ claim for benefits and intertwined with the parties’ EE relation. The
labor tribunals have jurisdiction.

2) Requiring clearance before release of last payments to the employee is a standard procedure
among employers. Generally, employers are prohibited from withholding wages from employees
(Art. 116, LC). LC also prohibits diminution of benefits (Art. 100, LC). But our law supports the
employers’ institution of clearance procedures before release of wages. An exception to
nonwithholding of wages is:
Art. 113. Wage deduction. No employer, in his own behalf or in behalf of any person,
shall make any deduction from the wages of his employees, except:
3. In cases where the employer is authorized by law or regulations issued by the Secretary
of Labor and Employment.
NCC provides that the employer is authorized to withhold wages for debts due:
Article 1706. Withholding of the wages, except for a debt due, shall not be made by the
employer.
“Debt” refers to any obligation due from the employee to the employer. It includes any
accountability that the employee has to the employer.
18. Cacho v. Balagtas, GR 202974, February 07, 2018, Leonardo-de Castro, J., First
Division.
FACTS:
Virginia Balagtas was one of the original incorporators-directors of petitioner North Star
International Travel. When it started in 1990, she was general manager and became the executive
vice president. On March 19, 2004, she was placed under 30 days preventive suspension
pursuant to a board resolution due to her questionable transactions. Petitioner Norma Cacho,
president, notified Balagtas of the suspension and ordered her to explain in writing her fraudulent
transactions. Balagtas complied. On April 5, 2004, Balagtas wrote Cacho, informing her that she
was assuming her position as EVP as of that date. But she was prevented from re-assuming her
position. Balagtas thus filed a complaint claiming that she was constructively and illegally
dismissed. Petitioners claim that Balagtas violated the suspension when she went on several
occasions to the corporation’s office and insisted on working.s

LA ruled that Balagtas was illegally dismissed. NLRC reversed. CA reversed NLRC, ruling that
the position of “Executive Vice President” of Balagtas is not the same as the “Vice Presidents” in
North Star’s by-laws, thus Balagtas is not a corporate officer and the dispute is not intra-
corporate- hence the labor tribunals have jurisdiction. Hence this petition.

ISSUE:
Whether the dispute between a corporation’s EVP and the corporation where the position of EVP
is not expressly stated in the by-laws, but it only states that there are many “vice presidents”, is
an intra-corporate dispute.
HELD: YES.
We agree with CA that a two-tier test must be employed to determine if an intra-corporate
dispute exists: 1) the relationship test 2) nature of the controversy test.

1) Relationship test.
a) A dispute is considered an intra-corporate controversy under the relationship test when the
relationship between or among the disagreeing parties is any one of the following: (a) between
the corporation, partnership, or association and the public; (b) between the corporation,
partnership, or association and its stockholders, partners, members, or officers; (c) between the
corporation, partnership, or association and the State as far as its franchise, permit or license to
operate is concerned; and (d) among the stockholders, partners, or associates themselves.

In Easycall v. King, SC ruled that one is a corporate officer only if 2 conditions are met: 1) the
position was created by charter/by-laws 2) the officer was elected (or appointed) by the
corporation’s board of directors.

b) S25 of the Corporation Code provides for the election of the president, treasurer, secretary,
and other officers provided in the by-laws. If a position is other than the corporate president,
treasurer, secretary, it must be expressly mentioned in the by-laws. North Star’s by-laws
provide:
Section 1. Election/Appointment - Immediately after their election, the Board of
Directors shall formally organize by electing the Chairman, the President, one or more
Vice-President (sic), the Treasurer, and the Secretary, at said meeting.
Thus, “one or more vice president” positions, by virtue of North Star’s by-laws, are corporate
offices. The phrase “one or more vice president” includes the vice president position of
Balagtas.

c) CA ruled that the position of Vice President is not the same as Balagtas’ EVP position. In
other words, the exact and complete name of the position must appear in the by-laws, otherwise
it is an ordinary office. But CA’s interpretation of “one or more vice president” unduly restricts
North Star’s inherent corporate power to adopt its by-laws. The use of “one or more” indicates
an intention to give North Star’s board ample freedom to make several VP positions as it may
deem fir. To require that each designation of VP be enumerated is to invalidate the by-laws’ true
intention and to encroach upon North Star’s inherent authority to adopt its own rules to govern
its internal affairs.

Thus, EVP is embraced in “one or more vice president.”

d) A secretary’s certificate in this case shows that Balagtas was elected EVP by the Board.
Balagtas assail the validity of the certificate for being forged. But these are bare allegations, she
had no proof to support her claim.

e) The by-laws state:

Section 4. The Vice-President(s) - If one or more Vice-Presidents are appointed, he/they
shall have such powers and shall perform such duties as may from time to time
be assigned to him/them by the Board of Directors or by the President. 
That Balagtas’ duties are determined by the president instead of the board is irrelevant. The
appointment/election still devolves upon the board of directors.

f) The manner of creation (provisions of Corpo Code or by-laws) and manner by which it is
filled (election or appointment of the board of directors) are sufficient in vesting a position the
character of a corporate office.

2) Nature of Controversy Test.

a) If the relationship and its incidents are merely incidental to the controversy or if there will still
be conflict even if the relationship does not exist, then no intra-corporate controversy exists. The
dismissal must relate to any of the circumstances and incidents surrounding the parties’
intra-corporate relationship. To be an intra-corporate controversy, the dismissal of a corporate
officer must have something to do with the duties and responsibilities attached to the
corporate office or performed in his official capacity.

Petitioners terminated Balagtas’ employment: (a) for allegedly appropriating company funds for
her personal gain; (b) for abandonment of work; (c) violation of a lawful order of the
corporation; and (d) loss of trust and confidence. Balagtas’ role is described in petitioners’
position paper as the one who approved payment vouchers and the signatory on issued
checks- responsibilities devolved upon Blaagtas as the vice president. And as VP, Balagtas
actively participated in the whole process, if not controlled it altogether. Thus, petitioners
accused Balagtas of gravely abusing the confidence of the Board in her and misappropriating
company funds for her own personal gain.
b) It is clear from these that the termination is intimately linked to Balagtas’ role as North Star’s
EVP. The alleged misappropriations were committed by Balagtas in her capacity as VP, and the
misappropriations breached petitioners’ confidence reposed in Balagtas as VP.

19. Sara Lee PH, Inc. v. Macatlang, et al., GR 180147, January 14, 2015, Perez, J., Special
Second Division. (Accepting an outrageously low amount as compromise defeats
complainant-employees’ legitimate claim [illegal dismissal case])
FACTS:
Aris PH, Inc. permanently ceased operations on October 09, 1995, displacing 5,984 rank-and-file
employees. On October 26, 1995, Fashion Accessories Phils., Inc. (FAPI) was incorporated
prompting former Aris employees to file a case for illegal dismissal on the allegation that FAPI
was a continuing business of Aris. Sara Lee Corporation (SLC), Sara Lee PH (SLP), and Cesar
Cruz were impleaded as defendants for being major stockholders of FAPI and officers of Aris
respectively.

LA found the dismissal of the 5,984 Aris employees illegal and awarded them monetary benefits
of P3,453,664,710.86 composed of separation pay of 1 month for every year of service. The
corporations filed a notice of appeal with motion to reduce appeal bond. They posted only a
P4.5M appeal bond NLRC granted the reduction, ordering the corporations to post additional
P4.5M bond.

The 5,984 former employees filed a petition for review in CA, insisting that the appeal was not
perfected due to failure of the corporations to post the correct amount of the bond. CA ordered
the corporations to post additional appeal bond of P1B. SC, in a decision dated June 4, 2014,
modified and directed the corporations to post P725M bond instead. Hence this motion for
reconsideration.

The parties then filed a motion to admit confession of judgment.

ISSUE:
Whether the confession of judgment where the employees agree to be paid P342,284,800 only
out of the original P3.4B award of the LA to them may be admitted.
HELD: NO.
1) The petitioners-corporations fault SC for failing to consider McBurnie v. Ganzon which
purported required posting of 10% monetary award bond only. But the 10% therein pertains to
the reasonable amount which NLRC would accept as minimum of the bond that should
accompany the motion to reduce bond in order to suspend the period to perfect appeal under
NLRC rules. The 10% is based on the judgment award and should not be construed as the
minimum bond to be posted to perfect appeal. McBurnie made it clear that the 10% bond set is
PROVISIONAL.

2) A compromise must not be contrary to law, morals, good customs and public policy; and must
have been freely and intelligently executed by and between the parties. Art. 227 of LC authorizes
compromise agreements voluntarily agreed upon by the parties in conformity with the basic
policy of the state to promote the primacy of free collective bargaining and negotiations,
including voluntary arbitration etc. as modes of settling labor disputes:
ART. 227 Compromise Agreements. – Any compromise settlement, including those
involving labor standard laws, voluntarily agreed upon by the parties with the assistance
of the Bureau or the regional office of the Department of Labor, shall be final and
binding upon the parties. The National Labor Relations Commission or any court shall
not assume jurisdiction over issues involved therein except in case of noncompliance
thereof or if there is prima facie evidence that the settlement was obtained through fraud,
misrepresentation, or coercion.
A compromise is valid as long as the consideration is reasonable and the employee signed the
waiver voluntarily, with full understanding of what he was entering into.

3) A review of the compromise agreement shows a gross disparity between the amount offered
by the Corporations compared to the judgment award.  The judgment award is
P3,453,664,710.86 or each employee is slated to receive P577,149.85.  On the other hand, the
P342,284,800.00 compromise is to be distributed among 5,984 employees which would translate
to only P57,200.00 per employee.  From this amount, P8,580.00 as attorney’s fees will be
deducted, leaving each employee with a measly P48,620.00.  In fact, the compromised amount
roughly comprises only 10% of the judgment award.

SC set the appeal bond to P725M taking into consideration the interests of all parties. The
premise of appeal bond is to ensure that the employer has properties on which he can execute
upon in the event of a final award. Thus, woefully insufficient payment of appeal bond frustrates
these ends. The appeal bond should be the base amount for negotiation between the parties. The
P342M compromise is still measly compared to the P725M bond we set.

4) Complainants justified their acquiescence to the compromise on the possibility that it will take
another decade before the case may be resolved. We beg to disagree. We have already directed
NLRC to act with dispatch in resolving the merits of the case upon receipt of the surety bond of
P725M. If indeed the parties want an immediate resolution of the case, NLRC should be
unhindered with technicalities to dispose of the case. Accepting an outrageously low amount of
consideration as compromise defeats complainants’ legitimate claim.

20. Mcburnie v. Ganzon, GR 178034, October 17, 2013, Reyes, J., En Banc.
FACTS:
McBurnie, an Australian, filed a complaint for illegal dismissal against respondents Ganzon and
EGI-Managers, Inc. He claims that he signed a 5-year employment agreement with EGI as EVP
to oversee management of the company’s hotels and resorts in PH. He worked until figuring in
an accident that compelled him to go back to Australia while recuperating. While there, he was
informed by Ganzon that his services were no longer needed because the project would no longer
push thru. Respondents opposed, claiming that their agreement with McBurnie was to jointly
invest in and establish a company for management of hotels. They did not create EE relationship
and the employment contract was intended only for McBurnie to obtain an alien work permit in
PHL. McBurnie had not yet obtained a work permit when he left for Australia.
LA ruled that McBurnie was illegally dismissed, awarding $985k, P2M damages, 10% attorney’s
fees. Respondents appealed with motion to reduce bond and posted an appeal bond of P100k,
contending that the award of more than P60M to a foreigner who had no work permit was a
patent nullity. NLRC denied the motion to reduce bond, ruling that Art. 223 unconditionally
requires bond in an amount equivalent to the monetary award.

Respondents filed a petition for certiorari with prayer for WPI and TRO in CA. NLRC
meanwhile dismissed the appeal for failure to post bond. CA granted injunction as affirmed by
SC. CA then ruled on the merits and allowed respondents’ motion to reduce appeal bond,
directing NLRC to give due course to the appeal with bond of P10M. McBurnie filed with SC a
petition for review on certiorari.

NLRC accepted the appeal acting on CA’s order and on November 17, 2009, dismissed
McBurnie’s complaint, finding him to be not an employee but only an investor. He also failed to
get work permit which would make any employment agreement with him void.

But SC, in a decision dated September 18, 2009, reversed the CA and affirmed the dismissal by
NLRC of the appeal of respondents due to failure to perfect appeal. McBurnie fioed with NLRC
a MR with motion to expunge from records the NLRC November 17, 2009 decision. NLRC
granted.

Respondents’ first MR of SC’s decision was denied. They filed a motion for leave with second
MR, which was also denied. SC made entry of judgment of the September 18, 2009 decision
which became final and executory on March 14, 2012.

Respondents filed a motion for leave to file third MR with motion to refer the cases to SC en
banc. SC en banc accepted the case from the third division, issuing a TRO.

ISSUE:
Whether respondents’ appeal from the LA decision may be given due course despite
respondents’ failure to post appeal bond equaling the LA’s monetary award.
HELD: YES.
1) S6, Rule VI of the 2011 NLRC Rules of Procedure reads:
Sec. 6. BOND. – In case the decision of the Labor Arbiter or the Regional Director
involves a monetary award, an appeal by the employer may be perfected only upon the
posting of a cash or surety bond. The appeal bond shall either be in cash or surety in an
amount equivalent to the monetary award, exclusive of damages and attorney’s fees.
xxxx
No motion to reduce bond shall be entertained except on meritorious grounds and upon
the posting of a bond in a reasonable amount in relation to the monetary award.
The filing of the motion to reduce bond without compliance with the requisites in the
preceding paragraph shall not stop the running of the period to perfect an appeal. 
SC’s decision of September 18, 2009 ruled that:
While the bond may be reduced upon motion by the employer, this is subject to the
conditions that (1) the motion to reduce the bond shall be based on meritorious grounds;
and (2) a reasonable amount in relation to the monetary award is posted by the appellant,
 otherwise the filing of the motion to reduce bond shall not stop the running of the period
to perfect an appeal. The qualification effectively requires that unless the NLRC grants
the reduction of the cash bond within the 10-day reglementary period, the employer is
still expected to post the cash or surety bond securing the full amount within the said 10-
day period. If the NLRC does eventually grant the motion for reduction after the
reglementary period has elapsed, the correct relief would be to reduce the cash or surety
bond already posted by the employer within the 10-day period.
Prevailing jurisprudence provides that filing of a motion to reduce bond, coupled with
compliance with the 2 conditions of 1) meritorious ground and 2) posting of a bond in a
reasonable amount shall suffice to suspend the running of the period to perfect appeal from
LA to NLRC. To require the full amount of bond within the 10-day reglementary period
would render nugatory the legal provisions allowing appellant to seek reduction of the bond.

1.1) At the time of filing of motion to reduce bond and posting of a bond in a reasonable amount,
there is no assurance whether appellant’s motion is indeed based on “meritorious ground”
and whether the bond he posted is a “reasonable amount”. Thus, appellant always runs the
risk of failing to perfect an appeal. If NLRC grants the motion, the appeal is perfected. If
NLRC denies, and also denies the MR, then the decision of the LA becomes final and
executory.

A serious error of NLRC was its outright denial of the motion to reduce bond without even
considering respondents’ arguments. Instead of resolving the motion, NLRC insisted on an
amount equivalent to the monetary award. By such haste, NLRC effectively denied respondents
of their opportunity to seek reduction of the bond even when the same is allowed under the
rules and jurisprudence. It was equivalent to NLRC’s refusal to exercise its discretion. Art. 223
should be given liberal interpretation in line with the desired objective of resolving controversies
on the merits.

1.2) Although the general rule provides that appeal in labor cases from a decision involving
money award may be perfected only upon posting of bond, the Court has relaxed this
requirement under exceptional circumstances to resolve cases on their merits, like: 1)
Consideration of substantial justice; 2) prevention of miscarriage of justice or unjust
enrichment; 3) special circumstances of the case combined with its legal merits, and the
amount and issue involved. The bond requirement in appeals may be relaxed in meritorious
cases, including instances in which: 1) there was substantial compliance with the rules, 2) facts
and circumstances constitute meritorious grounds to reduce bond, 3) liberal interpretation
would serve the objective of resolving controversies on the merits, 4) appellants at the very
least exhibited their willingness and/or good faith by posting a partial bond during the
reglementary period.

2) But SC still remains firm on the importance of appeal bonds. We stress that NLRC, under S6,
Rule VI of NLRC Rules, shall accept motions to reduce bond only if coupled with a bond in a
reasonable amount. What constitutes “reasonable amount of bond” may be subject to differing
interpretations. Thus, to ensure that S6, Rule VI is effectively carried out, without defeating the
benefits of the bond requirement in favor of a winning litigant, all motions to reduce bond filed
with NLRC shall be accompanied by the posting of a cash or surety bond equivalent to
10% of the monetary award subject of the appeal, which shall PROVISIONALLY be
deemed the reasonable amount of bond in the meantime that appellant’s motion is pending
resolution by NLRC. In conformity with NLRC Rules, the bond shall exclude award of
damages and attorney’s fees. Only after posting of a bond in the required percentage shall an
appellant’s period to perfect appeal under NLRC Rules be deemed suspended.

2.1) This shall not be misconstrued to hinder NLRC’s discretion given that the percentage of
bond that is set by this guideline shall be merely provisional. NLRC retains its authority to
resolve the motion and determine the final amount of bond still in accordance with the standards
of “meritorious grounds” and “reasonable amount.” If NLRC requires a greater amount, the party
shall comply within 10 days from notice of the NLRC order.

3) Meritorious grounds.
“Meritorious ground” delves on the worth of the parties’ arguments. The merit referred to may
pertain to an appellant’s lack of financial capability to pay the full amount of the bond, he merits
of the main appeal such as when there is a valid claim that there was no illegal dismissal to
justify the award, the absence of an employer-employee relationship, prescription of claims, and
other similarly valid issues that are raised in the appeal. For the purpose of determining a
"meritorious ground", the NLRC is not precluded from receiving evidence, or from making a
preliminary determination of the merits of the appellant’s contentions.

Here, NLRC should have considered respondents’ arguments in the memorandum on appeal
filed with the motion to reduce appeal bond. Although a consideration of said arguments at that
point would merely be preliminary and should not bind the outcome of the appeal, it was
apparent that respondents’ defenses came with an indication of merit that deserved full review.
NLRC found that the employment agreement could not have given rise to EE relationship since
McBurnie never acquired an Alien Employment Permit. NLRC found that McBurnie was instead
a potential investor in a project that included Ganzon, but the project failed due to lack of funds.
The alleged employment would have been void for being contrary to law since McBurnie did not
have work permit.

4) Reasonable amount of appeal bond.

In Nicol, where appellant posted a bond of P10M upon appeal from LA’s award of P51M, the
Court, instead of ruling right away on the reasonableness of the bond’s amount, found it
appropriate to remand to NLRc which should first determine the merits of the motion. In
University Plans, SC also reversed the outright dismissal of an appeal where the bond posted in a
judgment award of more than P30M was P30k. SC directed NLRC to first determine the merit of
the motion to reduce bond after appellant therein claimed that it was under receivership and thus
could not dispose of its assets within a short notice. These jurisprudence indicate that in
determining reasonable amount of appeal bonds, the Court primarily considered the MERITS
of the motions and appeals.

Given the circumstances in this case and htem erits of respondents’ arguments in NLRC, SC held
that respondents posted a bond in a “reasonable amount” and thus complied with the
requirements for perfection of an appeal from LA’s decision. This Court also finds the appeal
bond of P54M prohibitive and excessive, which is a meritorious ground to allow motion for
reduction.

5) That McBurnie failed to obtain employment permit by itself necessitates dismissal of his labor
complaint. NLRC had already ruled in its November 17, 2009 decision that McBurnie was never
an employee of any of respondents. SC now reconsiders its decision of September 18, 2009 and
to affirm CA’s decision in respondents’ favor, effectively restoring NLRC’s basis for rendering
the decision of November 17, 2009.

NLRC’s findings are supported by the records. McBurnie failed to present any employment
permit or other evidence to prove his claim of EE relationship.

It would thus be circuitous to remand the case to NLRC in the absence of showing that NLRC
should not rule differently on the case’s merits. When there is enough basis on which a proper
evaluation of the merits of the case may be had, SC may dispense with the time-consuming
procedure of remand to prevent further delays in the disposition of the case.

6) Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as
provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby
RESOLVES that henceforth, the following guidelines shall be observed:
(a) The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the
following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is
posted;
(b) For purposes o compliance with condition no. (2), a motion shall be accompanied by the
posting o a provisional cash or surety bond equivalent to ten percent (10%) of the monetary
award subject o the appeal, exclusive o damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running o the 1 0-day
reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine
the final amount o bond that shall be posted by the appellant, still in accordance with the
standards o meritorious grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds
the amount o the provisional bond, the appellant shall be given a fresh period o ten 1 0) days
from notice o the NLRC order within which to perfect the appeal by posting the required appeal
bond.

21. Garcia v. KJ Commercial, GR 196830, February 29, 2012, Carpio, J., Second division.
FACTS:
KJ is a sole proprietorship. It owns trucks and engages in the business of distributing cement
products. KJ employed truck drivers and helpers, including petitioners. Petitioners demanded
P40 daily salary increase. To pressure KJ to grant their demand, they stopped working and
abandoned their trucks at the northern Cement Plant Station in Sison, Pangasinan. They also
blocked other workers from reporting to work. Petitioenrs later filed with LA a complaint for
illegal dismissal and underpayment of salary.
LA ruled that petitioners were illegally dismissed, awarding P2,612,930. KJ appealed to NLRC;
it also filed with NLRC a motion to reduce bond and posted a P50k cash bond. NLRC dismissed
the appeal due to lack of appeal bond. KJ filed a motion for reconsideration and posted a
P2,562,930 surety bond. NLRC granted the motion; it then set aside LA’s decision. CA affirmed
NLRC. Hence this petition.

ISSUE:
Whether KJ failed to perfect appeal since the motion to reduce bond did not stop the running of
the period to appeal, thus the LA’s decision became final and executory (petitioners’ claim).
HELD: NO.
1) Petitioners’ argument cannot be passed upon in this appeal since it was not raised in the
tribunals a quo. Issues not raised below cannot be raised for the first time on appeal.

2) KJ’s filing of motion to reduce bond and delayed posting of the P2,562,930 bond did not
render LA’s decision final and executory. NLRC Rules allows the filing of a motion to reduce
bond subject to 2 conditions: 1) (1) there is meritorious ground, and (2) a bond in a reasonable
amount is posted. SC cites S6, Art. VI of NLRC Rules:
No motion to reduce bond shall be entertained except on meritorious grounds and upon
the posting of a bond in a reasonable amount in relation to the monetary award.
The mere filing of the motion to reduce bond without compliance with the requisites in
the preceding paragraph shall not stop the running of the period to perfect an appeal.
Filing of motion to reduce bond and compliance with the 2 conditions stop the running of
the period to perfect appeal. SC cites McBurnie v. Ganzon.

Here, KJ filed a motion to reduce bond and posted a P50k cash bond. When NLRC denied its
motion, KJ filed a MR and posted the full P2,562,930 surety bond.

3) The perfection of an appeal within the reglementary period and in the manner prescribed by
law is JURISDICTIONAL. LC provides:
ART. 223. Appeal. — Decisions, awards or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders.

The rule that filing a motion to reduce bond shall not stop the running of the period to perfect
appeal is not absolute. The Court may relax the rule under exceptional circumstances.

Also, appeal of a decision involving monetary award in labor cases may be perfected only upon
posting of bond. But the Court has relaxed this requirement. Some of these instances include: (a)
counsel’s reliance on the footnote of the notice of the decision of the labor arbiter that the
aggrieved party may appeal within ten (10) working days; (b) fundamental consideration of
substantial justice; (c) prevention of miscarriage of justice or of unjust enrichment, as where the
tardy appeal is from a decision granting separation pay which was already granted in an earlier
final decision; and (d) special circumstances of the case combined with its legal merits or the
amount and the issue involved.
Relaxation of the appeal bond requirement is justified by substantial compliance with the NLRC
Rules or when appellant shows willingness to post a partial bond. The motion to reduce bond
with the P50k is substantial compliance with the Labor Code. KJ showed willingness to
post a partial bond.

22. Garcia v. PAL, GR 164856, January 20, 2009, Carpio-Morales, J., En Banc.
FACTS:
PAL dismissed petitioners, its employees, for allegedly being caught in the act of sniffing shabu
when a team of company security personnel raided PAL Technical Center’s Toolroom Section.
Petitioners filed a complaint for illegal dismissal and damages. Lam by decision of January 11,
1999, ruled in their favor and ordered PAL to immediately comply with the reinstatement aspect
of the decision.

Prior to promulgation of LA’s decision, SEC placed PAL, which was suffering from severe
financial losses, under a rehabilitation receiver. PAL appealed to NLRC which reversed and
dismissed petitioners’ complaint. Petitioners’ MR was denied and entry of judgment was issued.

Later, LA issued a writ of execution as to the reinstatement aspect of his January 11, 1999
decision and issued a notice of garnishment. PAL moved to quash. NLRC affirmed the validity
of the writ and notice. CA reversed NLRC, ruling that there was impossibility to comply with the
reinstatement order due to rehabilitation. Hence this petition. The proceedings were suspended
until PAL came out of rehabilitation on September 28, 2007.

ISSUE:
Whether petitioners former PAL employees may collect their wages during the period between
LA’s order of reinstatement (immediately executory) pending appeal and the NLRC decision
overturning LA.
HELD: NO, due to PAL being under rehabilitation proceedings at the time of LA’s decision.
1) One line of cases rules that a dismissed employee whose case was favorable decided by LA
is entitled to receive wages pending appeal upon reinstatement, which is immediately
executory. Unless there is a restraining order, it is ministerial upon the LA to implement the
order of reinstatement.

The opposite view is articulated in Genuino v. NLRC, which states that if the LA decision is
reversed on appeal upon the finding that the dismissal was valid, the employer has the right to
require the dismissed employee on payroll reinstatement to refund the salaries he received
while the case was pending appeal, or it can be deducted from the accrued benefits.

Art. 223 of LC states:

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, pending appeal. The employee shall either be admitted back to work under the
same terms and conditions prevailing prior to his dismissal or separation or, at the option
of the employer, merely reinstated in the payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement provided herein.
2) The social justice principles of labor law outweigh or render inapplicable the civil law
doctrine of unjust enrichment. Pursuant to police power, the state may authorize an immediate
implementation pending appeal of a decision reinstating a dismissed employee since that saving
act may stop a continuing threat or danger to the survival of the dismissed employee and his
family. Genuino not only disregards social justice principles, is unduly favorable to management.

3) To require a writ of execution as prerequisite for execution of a reinstatement award would

betray the intent of Art. 223- immediate execution of a reinstatement order. An application for
writ of execution and its issuance could be delayed for numerous reasons. In other words, if the
requirements of Art. 224, including issuance of writ of execution, were to govern, then the
executory nature of a reinstatement award in Art. 223 will be rendered ineffectual.

Thus, the SC reaffirms the prevailing principle that even if LA’s order is reversed on appeal,
the employer is obligated to reinstate and pay the wages of the dismissed employee during
the period of appeal until reversal. LA’s order of reinstatement is immediately executory and
the employer has to either re-admit the employee to work under the same terms or to reinstate
them in the payroll, and failing to exercise the options in the alternative, the employer must pay
the employee’s salaries.

4) However, the employee may be barred from collecting the accrued wages if the delay in
enforcing reinstatement pending appeal was without fault on the part of the employer. The test
is two-fold: (1) there must be actual delay or the fact that the order of reinstatement pending
appeal was not executed prior to its reversal; and (2) the delay must not be due to the employer's
unjustified act or omission. The new NLRC Rules now require the employer to submit a report
of compliance within 10 calendar days from receipt of LA’s decision. The employee need not
file a motion for issuance of writ of execution since LA shall motu proprio issue the writ. With
the new rules, there is hardly any difficulty in determininig the employer’s intransigence in
immediately complying with the order.

5) There was inaction by PAL to reinstate petitioners. But case law recognizes that unless there
is a RESTRAINING ORDER, implementation of the order of reinstatement is mandatory.
The injunction and suspension of claims by legislative fiat, (upon appointment of rehabilitation
receiver, all claims before any court against the corporation shall be ipso jure suspended)
partakes of the nature of a restraining order that is legal justification for PAL’s non-
compliance.

23. University of Immaculate Concepcion, Inc. v. Sec. of Labor, GR 151379, January 14,
2005, Azcuna, J., First Division.
FACTS:
University of Immaculate Concepcion and respondent UIC Teaching and Non-Teaching
Personnel and Employees Union collectively bargained. The Union submitted its collective
bargaining proposals to the University. One item was left unresolved- the inclusion or exclusion
of these positions in the bargaining unit: secretaries, registrars, accounting personnel, guidance
counselors. The matter was submitted for voluntary arbitration.
The panel of voluntary arbitrators rendered a decision, ruling that these positions should be
excluded from the bargaining unit. Union moved to reconsider, but pending its MR, it filed a
notice of strike with NCMB on the ground of bargaining deadlock and ULP. They went on
strike.

SOL Confessor assumed jurisdiction over the labor dispute and ordered all workers to return to
work. Later, the panel of voluntary arbitrators denied the MR of the Union. Thereafter,
University gave the individual respondents (secretaries, guidance counselors accounting
personnel, registrars) 2 choices- resign from the Union and remain as confidential employees or
resign from their confidential positions and remain members of the Union. But respondents still
claimed that they could retain both. Thus, University terminated their employment.

Union filed another notice of strike due to this termination. SOL issued another order, stating
that the effects of termination should be suspended pending determination of legality thereof; it
ordered University to reinstate respondents under the same terms and conditions prevailing
prior to the labor dispute. University’s MR was denied. Its third MR was denied, but SOL
ordered that instead of reinstatement, respondents should be placed under payroll reinstatement
instead due to superseding circumstances.

University filed a petition with SC, which was referred to CA. CA affirmed SOL’s orders. Hence
this petition.

ISSUE:
Whether Secretary of Labor has jurisdiction to order reinstatement/payroll reinstatement of 12
employees who were not part of the bargaining unit where the SOL assumed jurisdiction over the
dispute after the employees striked.
HELD: YES.
1) University claims that SOL cannot take cognizance of an issue involving employees who are
not part of the bargaining unit.

SC recognizes the exercise of management prerogatives of an employer. But this is not absolute.
One of these exceptions is when SOL assumes jurisdiction over labor disputes involving
industries indispensable to national interest under Art. 263(g) of LC:
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to
the Commission for compulsory arbitration. Such assumption or certification shall have
the effect of automatically enjoining the intended or impending strike or lockout as
specified in the assumption or certification order. If one has already taken place at the
time of assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume operations and
readmit all workers under the same terms and conditions prevailing before the strike or
lockout. x x x
2) The substantive evil Art. 263(g) seeks to curb is the exacerbation of a labor dispute to the
further detriment of the national interest. The rationale for exercise of SOL’s power under
Art. 263(g) is the maintenance of the status quo while the dispute is being adjudicated.

University’s act of suspending union members and Union’s act of filing another notice of strike
after SOL has assumed jurisdiction conflict with the status quo ante. These actions served to
aggravate the already strained labor-management relations. It is not a question anymore of
whether or not the terminated employees, respondents, are part of the bargaining unit. Any
act committed during pendency of the dispute that tends to give rise to further contentious
issues should be considered an exacerbation and not allowed.

24. Yupangco Cotton Mills, Inc. v. CA, GR 126322, January 16, 2002, Pardo, J., First
Division.
FACTS:
Yupango has taken these actions in connection with its claim that a sheriff of NLRC erroneously
and unlawfully levied upon properties which it claims as its own:
1) notice of third party claim with LA; 2) affidavit of Adverse claim with NLRC, dismissed by
LA; 3) certiorari and prohibition with RTC, dismissed; 4) appealed to NLRC the order of LA,
dismissed; 5) mandatory injunction with NLRC, pending; 6) complaint in RTC (accion
reinvindicatoria). The dismissal of #6 triggered the filing of this petition. CA ruled that there
was forum shopping.

ISSUE:
Whether RTC has jurisdiction over the complaint for accion reinvindicatoria arising from
NLRC’s attachment of a property that does not belong to the defendant in the relevant labor case
with it.
HELD: YES.
1) There is no forum-shopping where two different orders were questioned, two distinct causes
of action and issues were raised, and two objectives were sought.

Here there was no identity of parties, rights and causes of action and reliefs sought. The case
before the NLRC where Labor Arbiter Reyes issued a writ of execution on the property of
petitioner was a labor dispute between Artex and Samar-Anglo. Petitioner was not a party to the
case. The only issue petitioner raised before the NLRC was whether or not the writ of execution
issued by the labor arbiter could be satisfied against the property of petitioner, not a party to the
labor case. On the other hand, the accion reinvindicatoria filed by petitioner in the trial court was
to recover the property illegally levied upon and sold at auction. Hence, the causes of action in
these cases were different.

2) A third party whose property has been levied upon by a sheriff to enforce a decision against a
judgment debtor has several alternative remedies:
a) File a third party claim with the sheriff of the Labor Arbiter, and
b) If the third party claim is denied, the third party may appeal the denial to the NLRC.
Even if the third party claim is denied, the third party may still file a proper action in court to
recover ownership of property illegally seized by the sheriff. This finds support in S16, Rule 39:
 Xxx But nothing herein contained shall prevent such claimant or any third person from
vindicating his claim to the property by any proper action.xxx
The third party may also avail of terceria provided in S16, Rule 39 by serving on the officer
making the levy an affidavit of his title and a copy thereof upon the judgment creditor.

But these remedies are without prejudice to any proper action that a third party claimant may file
to vindicate his claim to the property. He must file this action in a court separate from that in
which the judgment is being enforced.

3) In Santos v. Bayhon, the LA and NLRC sheriff moved to dismiss the civil case instituted
therein to recover third-party property incorrectly levied by NLRC on the ground that RTC did
not have jurisdiction over the labor case. RTC enjoined enforcement of writ of execution of
NLRC over the properites. In dismissing LA’s certiorari therein, we held:

“The power of the NLRC to execute its judgments extends only to properties unquestionably
belonging to the judgment debtor. The general rule that no court has the power to interfere by
injunction with the judgments or decrees of another court with concurrent or coordinate
jurisdiction possessing equal power to grant injunctive relief, applies only when no third-party
claimant is involved. “

25. Sadol v. Pilipinas Kao, GR 87530, June 13, 1990, Gancayco, J., First Division.
FACTS:
Sadol was recruited laborer by private respondents, owners of Vega & Co., private recruitment
agency. He was assigned at respondent Pilipinas Kao, Inc. (PKI) at the Pit Burning area. He was
allegedly summarily dismissed. Thus, he filed a complaint for reinstatement and backwages with
DOLE.

The LA ordered private respondents to solidarily pay Sadol his separation pay of 1 month for
every year of service. Sadol appealed to NLRC. Respondents also appealed but it was filed
out of time.

NLRC modified the appealed decision in that PKI was ordered to reinstate Sadol or, in case this
is impossible, pay full backwages and separation pay. PKI’s appeal was dismissed for being filed
out of time. PKI filed a motion for reconsideration of NLRC’s decision. NLRC then dismissed
the case for lack of merit. Sadol’s MR was dismissed. Hence this petition.

ISSUE:
Whether a party who failed to appeal from a decision of the LA to NLRC within the 10-day
reglementary period can still participate in a separate appeal interposed by the adverse party, by
filing a motion for reconsideration of the NLRC decision on such appeal.
HELD: YES.
as petitioner had filed a timely appeal the NLRC had jurisdiction to give due course to his appeal
and render the decision of August 28, 1988, a copy of which was furnished respondents. Having
lost the right to appeal can respondent PKI file a motion for reconsideration of said decision?
The Court resolves the question in the affirmative. The rules of technicality must yield to the
broader interest of justice. It is only by giving due course to the motion for reconsideration that
was timely filed that the NLRC may be able to equitably evaluate the conflicting versions of
facts presented by the parties.