189.

Medina v Castro-Bartolome
G.R. No. L-59825 September 11, 1982

Doctrine:
IT has been alreadly settled by jurisprudence that mere asking for reinstatement does not remove
from the CFI jurisdiction over the damages. The case must involve unfair labor practices to bring
it within the jurisdiction of the CIR (now NLRC).

Facts:
That on or about 1:00 o'clock in the afternoon of December 20, 1977, defendant Cosme de
Aboitiz, acting in his capacity as President and Chief Executive Officer of the defendant Pepsi-
Cola Bottling Company of the Philippines, Inc., went to the Pepsi-Cola Plant in Muntinlupa, Metro
Manila, and without any provocation, shouted and maliciously humiliated the plaintiffs with the
use of the following slanderous language and other words of similar import uttered in the presence
of the plaintiffs' subordinate employees, thus-

GOD DAMN IT. YOU FUCKED ME UP ... YOU SHUT UP! FUCK YOU! YOU ARE BOTH SHIT
TO ME! YOU ARE FIRED (referring to Ernesto Medina). YOU TOO ARE FIRED! '(referring to
Jose Ong )

That on January 9, 1978, the herein plaintiffs filed a joint criminal complaint for oral defamation
against the defendant Cosme de Aboitiz duly supported with respective affidavits and
corroborated by the affidavits of two (2) witnesses: Isagani Hernandez and Jose Ganseco II, but
after conducting a preliminary investigation, Hon. Jose B. Castillo, dismissed the complaint
allegedly because the expression "Fuck you and "You are both shit to me" were uttered not to
slander but to express anger and displeasure;

That on February 8, 1978, plaintiffs filed a Petition for Review with the office of the Secretary of
Justice (now Ministry of Justice) and on June 13, 1978, the Deputy Minister of Justice, Catalino
Macaraig, Jr., issued a resolution sustaining the plaintiff's complaint, reversing the resolution of
the Provincial Fiscal and directing him to file against defendant Cosme de Aboitiz an information
for Grave Slander.

That the defendants were moved by evil motives and an anti-social attitude in dismissing the
plaintiffs because the dismissal was effected on the very day that plaintiffs were awarded rings of
loyalty to the Company, five days before Christmas and on the day when the employees'
Christmas party was held in the Muntinlupa Plant, so that when plaintiffs went home that day and
found their wives and children already dressed up for the party, they didn't know what to do and
so they cried unashamedly.

That because of the anti-social manner by which the plaintiffs were dismissed from their
employment and the embarrassment and degradation they experience in the hands of the
defendants, the plaintiffs have suffered and will continue to suffer wounded feelings, sleepless
nights, mental torture, besmirched reputation and other similar injuries, for which the sum of
P150,000.00 for each plaintiff, or the total amount. of P300,000.00 should be awarded as moral
damages.

Issue:
whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs

Ruling:

It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs
is a simple action for damages for tortious acts allegedly committed by the defendants. Such
being the case, the governing statute is the Civil Code and not the Labor Code.

190. Bañez v Hon Valdevilla

Doctrine:

Facts:
Baez was the sales operations manager of Oro Marketing Inc. In 1993, Oro Marketing indefinitely
suspended Baez, prompting Baez to file for illegal dismissal. Labor Arbiter ruled in favor of Baez.
Since Oro Marketing failed to timely file the appeal, both NLRC and SC dismissed the same.

Oro Marketing filed a complaint for damages before the RTC for loss of profit, cost of supplies,
litigation expenses, and attorney’s fees. It alleged that due to Baez’ modus operandi, its sales
decreased and reduced its profits.

Baez filed a motion to dismiss, interposing that the action for damages, having arisen from
employer-employee relationship, was squarely under the exclusive original jurisdiction of NLRC
under Art. 217(a) par. 4 of Labor Code, and is barred by reason of the final judgment in labor
case. As such, he accused Oro Marketing of splitting causes of action, and that the latter should
have included the claim in its counterclaim before the Labor Arbiter.

The respondent RTC Judge Valdevilla ruled that it had jurisdiction over the subject matter, since
the complaint did not ask for any relief under the Labor Code, but rather to recover damages as
redress for Baez’s nefarious activities, causing damage and prejudice to Oro Marketing. Since
this there was a breach of contractual obligation, which is within the realm of civil law, the
jurisdiction belongs to the regular courts.

Issue:
Whether or not RTC has jurisdiction over the claim for damages filed by Oro Marketing against
Baez.

Ruling:
No. RTC had no jurisdiction over Oro Marketing’s complaint for damages.
RTC was incorrect in saying that the resolution of the issues presented by the complaint did not
entail application of the Labor Code or other labor laws; the dispute was intrinsically civil. 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.

It is clear that under Art. 217(a) par. 4 of Labor Code, the Labor Arbiter and NLRC have original
and exclusive jurisdiction claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations. This provision is the result of the amendment by Section
9 of Republic Act (“R.A.”) No. 6715, which took effect on March 21, 1989, and which put to rest
the earlier confusion as to who between Labor Arbiters and regular courts had jurisdiction over
claims for damages as between employers and employees.

It will be recalled that years prior to R.A. 6715, jurisdiction over all money claims of workers,
including claims for damages, was originally lodged with the Labor Arbiters and the NLRC by
Article 217 of the Labor Code. On May 1, 1979, however, Presidential Decree (“P.D.”) No. 1367
amended said Article 217 to the effect that “Regional Directors shall not indorse and Labor
Arbiters shall not entertain claims for moral or other forms of damages.” This limitation in
jurisdiction, however, lasted only briefly since on May 1, 1980, P.D. No. 1691 nullified P.D. No.
1367 and restored Article 217 of the Labor Code almost to its original form. Presently, and as
amended by R.A. 6715, the jurisdiction of Labor Arbiters and the NLRC in Article 217 is
comprehensive enough to include claims for all forms of damages “arising from the employer-
employee relations”.

By the designating clause “arising from the employer-employee relations”, Art. 217 should also
apply with equal force to the claim of an employer for actual damages against its dismissed
employee, where the basis for the claim arises from or is necessarily connected with the fact of
termination, and should be entered as a counterclaim in the illegal dismissal case.

In this case, Oro Marketing’s claim against Baez for actual damages arose from a prior employer-
employee relationship. In the first place, Oro Marketing’s would not have taken issue with Baez’s
“doing business of his own” had the latter not been concurrently its employee. Thus, the damages
alleged in the complaint were: first, those amounting to lost profits and earnings due to Baez’s
abandonment or neglect of his duties as sales manager, having been otherwise preoccupied by
his unauthorized installment sale scheme; and second, those equivalent to the value of Oro
Marketing’s property and supplies which Baez used in conducting his “business”.

Second, contrary to Oro Marketing’s allegations, no business losses may be attributed to Baez
as in fact, it was by reason of Baez’s sales operations that the sales reached its highest record
level, and that the installment scheme was in fact with the knowledge of the management of Oro
Marketing. In other words, the issue of actual damages has been settled in the labor case, which
is now final and executory.
This is, of course, to distinguish from cases of actions for damages where the employer-employee
relationship is merely incidental and the cause of action proceeds from a different source of
obligation. Thus, the jurisdiction of regular courts was upheld where the damages, claimed for
were based on tort, malicious prosecution, or breach of contract, as when the claimant seeks to
recover a debt from a former employee or seeks liquidated damages in enforcement of a prior
employment contract.