1. JURISDICTION OVER CERTAIN ISSUES AS PROVIDED IN JURISPRUDENCE.
In accordance with well-entrenched jurisprudence, the issues, claims or cases of the following fall under the jurisdiction of the Labor Arbiters:
(a) Employees in government-owned and/or controlled corporations without original charters;
(b) Domestic workers or kasambahay;
(c) Employees of cooperatives;
(d) Counter-claims of employers against employees.
X-1.
JURISDICTION OVER CASES OF DOMESTIC WORKERS OR KASAMBAHAY 1. WHEN LABOR ARBITERS HAVE JURISDICTION.
The Labor Arbiter has jurisdiction if the amount of the claim exceeds P5,000.00; otherwise, the jurisdiction is vested with the DOLE Regional Director under Article 129 of the Labor Code.
Incidentally, it is no longer legally correct to use the term “domestic servant” or “househelper” in reference to a person who performs domestic work. Under R.A. No. 10361, “domestic servant” or “househelper”
should now be referred to as “domestic worker” or “kasambahay.”
X-2.
JURISDICTION OVER CASES OF EMPLOYEES OF COOPERATIVES 1. WHEN LABOR ARBITERS HAVE JURISDICTION.
The Labor Arbiter has jurisdiction only over monetary claims and illegal dismissal cases involving employees or member-employees of cooperatives but not the claims or termination of membership of members thereof. Cooperatives organized under R.A. No. 6938, are composed of members; hence, issues on the termination of their membership with the cooperative do not fall within the jurisdiction of the Labor Arbiters.
Simply stated, insofar as member-employees are concerned, there is a need to determine their cause of action. If what they are asserting arose from their employment relationship with the cooperative, such as monetary claims or illegal dismissal cases, then, the Labor Arbiter has jurisdiction thereover. But if the action involves their membership with the cooperative, then, it is considered an intra-cooperative dispute which falls under the jurisdiction of the Cooperative Development Authority (CDA).
Members of cooperatives or member-employees thereof are not allowed to organize a labor organization to collectively bargain with the cooperative because they are the owners of the cooperative. They cannot negotiate with themselves. Only employees of cooperative can organize such labor organization, for obvious reason.
X-3.
JURISDICTION OVER COUNTER-CLAIMS OF EMPLOYERS
1. EMPLOYERS MAY ASSERT COUNTER-CLAIMS AGAINST EMPLOYEES FILED BY THE LATTER BEFORE THE LABOR ARBITERS.
Almost all labor cases decided by labor courts involve claims asserted by the workers. The question that may be propounded is whether the employers can assert counter-claims against their employees before the Labor Arbiters. The Supreme Court answered this poser in the affirmative.
Bañez v. Hon. Valdevilla. - The jurisdiction of Labor Arbiters and the NLRC is comprehensive enough to 1 include claims for all forms of damages “arising from the employer-employee relations.” By this clause, Article 217 should apply with equal force to the claim of an employer for actual damages against its dismissed employee, where the basis for the claim arises from or is necessarily connected with the fact of termination, and should be entered as a counter-claim in the illegal dismissal case. This is in accord with paragraph 6 of Article 217(a), which covers “all other claims, arising from employer-employee relations.”
But such counter-claim, being a factual issue, must be asserted before the Labor Arbiter; otherwise, it can no longer be passed upon by a reviewing court.
XI.
ISSUES AND CASES OVER WHICH LABOR ARBITERS HAVE NO JURISDICTION 1
. LABOR ARBITERS HAVE NO JURISDICTION OVER CERTAIN ISSUES AND CASES.
The following issues or cases do not fall under the jurisdiction of Labor Arbiters:
(a) Claims for damages arising from breach of a non-compete clause and other post-employment prohibitions;
(b) Claims for payment of cash advances, car, appliance and other loans of employees;
(c) Dismissal of corporate officers and their monetary claims;
(d) Cases involving entities immune from suit;
(e) Cases falling under the doctrine of forum non conveniens;
(f) Constitutionality of CBA provisions.
XI-A.
CLAIMS FOR DAMAGES ARISING FROM BREACH OF NON-COMPETE CLAUSE AND OTHER POST-EMPLOYMENT PROHIBITIONS
1. JURISDICTION IS LODGED WITH THE REGULAR COURTS.
In case of violation of the non-compete clause and similar post-employment bans or prohibitions, the employer can assert his claim for damages against the erring employee with the regular courts and not with the labor courts.
XI-B.
EMPLOYER’S CLAIMS FOR CASH ADVANCES, CAR, APPLIANCE AND OTHER PERSONAL LOANS OF EMPLOYEES
1. LABOR ARBITERS HAVE NO JURISDICTION.
With respect to resolving issues involving loans availed of by employees from their employers, it has been the consistent ruling of the Supreme Court that the Labor Arbiters have no jurisdiction thereover but the regular courts.
Where the claim to the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. In such situations, resolutions of the dispute requires expertise, not in labor management relations nor in wage structures and other terms and conditions of employment, but rather in the application of the general civil law. Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to Labor Arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears.”
The following loans may be cited:
G.R. No. 128024, May 9, 2000, 331 SCRA 584.
1
a. Cash loans/advances are in the nature of simple collection of a sum of money brought by the employer, as creditor, against the employee, as debtor. The fact that they were employer and employee at the time of the transaction does not negate the civil jurisdiction of the trial court. The case does not involve adjudication of a labor dispute but recovery of a sum of money based on our civil laws on obligation and contract.
b. Car loans such as those granted to sales or medical representatives by reason of the nature of their work. The employer’s demand for payment of the employees’ amortizations on their car loans, or, in the alternative, the return of the cars to the company, is not a labor, but a civil, dispute. It involves debtor-creditor relations, rather than employee-employer relations.
c. Appliance loans concern the enforcement of a loan agreement involving debtor-creditor relations founded on contract and do not in any way concern employee relations. As such it should be enforced through a separate civil action in the regular courts and not before the Labor Arbiter.
d. Loans from retirement fund also involve the same principle as above; hence, collection therefor may only be made through the regular courts and not through the Labor Arbiter or any labor tribunal.
XI-C.
DISMISSAL OF DIRECTORS AND CORPORATE OFFICERS 1. LABOR ARBITERS HAVE NO JURISDICTION.
The dismissal of a director or corporate officer is an intra-corporate dispute cognizable by the Regional Trial Court and not by the Labor Arbiter.
2. MATLING DOCTRINE.
Under this doctrine, the following rules should be observed: 1
(1) The dismissal of regular employees falls under the jurisdiction of Labor Arbiters; while that of corporate officers falls within the jurisdiction of the regular courts.
(2) The term “corporate officers” refers only to those expressly mentioned in the Corporation Code and By-Laws; all other officers not so mentioned therein are deemed employees.
(3) Corporate officers are elected or appointed by the directors or stockholders, and those who are given that character either by the Corporation Code or by the corporation’s by-laws.
(4) The Corporation Code specifically mentions only the following corporate officers, to wit: president, secretary and treasurer and such other officers as may be provided for in the by-laws.
(5) The Board of Directors can no longer create corporate offices because the power of the Board of Directors to create a corporate office cannot be delegated. Therefore, the term “corporate officers”
should only refer to the above and to no other. A different interpretation can easily leave the way open for the Board of Directors to circumvent the constitutionally guaranteed security of tenure of the employee by the expedient inclusion in the By-Laws of an enabling clause on the creation of just any corporate officer position.
(6) Distinction between a corporate officer and an employee. - An “office” is created by the charter of the corporation and the “corporate officer” is elected by the directors or stockholders. On the other hand, an “employee” occupies no office and generally is employed not by the action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee.
(7) Because of the Matling doctrine, the rulings in Tabang and Nacpil, are no longer controlling because they are “too sweeping and do not accord with reason, justice, and fair play.”
(8) The status of an employee as director and stockholder does not automatically convert his dismissal into an intra-corporate dispute.
(9) TWO (2) ELEMENTS TO DETERMINE WHETHER A DISPUTE IS INTRA-CORPORATE OR NOT.
(a) The status or relationship of the parties (Relationship test); and
(b) The nature of the question that is the subject of their controversy. (Nature of controversy test).
In the absence of any one of these factors, the RTC will not have jurisdiction.
(10) The criteria do not depend on the services performed but on the manner of creation of the office.
In Matling, respondent Corros was supposedly at once an employee, a stockholder, and a Director of Matling. The circumstances surrounding his appointment to office must be fully considered to determine whether the dismissal constituted an intra-corporate controversy or a labor termination dispute. It must also be considered whether his status as Director and stockholder had any relation at all to his appointment and subsequent dismissal as Vice President for Finance and Administration.
Enunciated in the 2010 case of Matling Industrial and Commercial Corp. v. Ricardo R. Coros, G.R. No. 157802, Oct. 13, 2010. This case is an appeal via petition for 1
review on certiorari. The petitioners challenge the decision of the CA which sustained the ruling of the NLRC to the effect that the Labor Arbiter had jurisdiction because the respondent, its Vice President for Finance and Administration, was not a corporate officer of petitioner Matling.
Obviously enough, the respondent was not appointed as Vice President for Finance and Administration because of his being a stockholder or Director of Matling. He had started working for Matling on September 8, 1966, and had been employed continuously for 33 years until his termination on April 17, 2000. His first work as a bookkeeper and his climb in 1987 to his last position as Vice President for Finance and Administration had been gradual but steady. Even though he might have become a stockholder of Matling in 1992, his promotion to the position of Vice President for Finance and Administration in 1987 was by virtue of the length of quality service he had rendered as an employee of Matling. His subsequent acquisition of the status of Director/stockholder had no relation to his promotion. Besides, his status of Director/stockholder was unaffected by his dismissal from employment as Vice President for Finance and Administration.
3. SIGNIFICANT CASES DECIDED BASED ON THE MATLING DOCTRINE.
a. Cosare v. Broadcom Asia, Inc., (2014)
In this 2014 case, the Supreme Court ruled that the Labor Arbiter, not the regular courts, has original jurisdiction over the illegal dismissal case filed by petitioner Cosare who was an incorporator of respondent Broadcom and was holding the position of Assistant Vice President for Sales (AVP for Sales) and Head of the Technical Coordination at the time of his termination. The following justifications were cited in support of this ruling:
(1) The mere fact that a person was a stockholder and an officer of the company at the time the subject controversy developed does not necessarily make the case an intra-corporate dispute.
(2) A person, although an officer of the company, is not necessarily a corporate officer thereof.
(3) General Information Sheet (GIS) submitted to SEC neither governs nor establishes the nature of office.
(4) The Nature of the Controversy Test: The mere fact that a person was a stockholder at the time of the filing of the illegal dismissal case does not make the action an intra-corporate dispute.
b. Other cases:
(1) Barba v. Liceo de Cagayan University (2012);
(2) Marc II Marketing, Inc. and Lucila V. Joson v. Alfredo M. Joson (2011);
(3) Real v. Sangu Philippines, Inc. (2011).
XI-D.
LABOR CASES INVOLVING ENTITIES IMMUNE FROM SUIT 1. IMMUNE ENTITIES CANNOT BE SUED FOR LABOR LAW VIOLATIONS.
In this jurisdiction, the generally accepted principles of international law are recognized and adopted as part of the law of the land. Immunity of a State and international organizations from suit is one of these universally recognized principles. It is on this basis that Labor Arbiters or other labor tribunals have no jurisdiction over immune entities.
2. ILLUSTRATIVE CASE.
In Department of Foreign Affairs v. NLRC, involving an illegal dismissal case filed against the Asian 1 Development Bank (ADB), it was ruled that said entity enjoys immunity from legal process of every form and therefore the suit against it cannot prosper. And this immunity extends to its officers who also enjoy immunity in respect of all acts performed by them in their official capacity. The Charter and the Headquarters Agreement granting these immunities and privileges to the ADB are treaty covenants and commitments voluntarily assumed by the Philippine government which must be respected.
3. EXCEPTION TO THE RULE.
There is an exception to the immunity rule as exemplified by the case of United States v. Hon. Rodrigo, 2 where it was held that when the function of the foreign entity otherwise immune from suit partakes of the nature of a proprietary activity, such as the restaurant services offered at John Hay Air Station undertaken by the United States Government as a commercial activity for profit and not in its governmental capacity, the case for illegal dismissal filed by a Filipino cook working therein is well within the jurisdiction of Philippine courts. The reason is that by entering into the employment contract with the cook in the discharge of its proprietary functions, it impliedly divested itself of its sovereign immunity from suit.
4. ESTOPPEL DOES NOT CONFER JURISDICTION OVER AN IMMUNE ENTITY.
An entity immune from suit cannot be estopped from claiming such diplomatic immunity since estoppel does not operate to confer jurisdiction to a tribunal that has none over a cause of action.
XI-E.
DOCTRINE OF FORUM NON CONVENIENS
G.R. No. 113191, Sept. 18, 1996, 262 SCRA 39, 43-44.
1
G.R. No. 79470, Feb. 26, 1990, 182 SCRA 644, 660.
2
1. REQUISITES.
This doctrine is an international law principle which has been applied to labor cases. The following are the requisites for its applicability:
(1) That the Philippine court is one to which the parties may conveniently resort;
(2) That the Philippine court is in a position to make an intelligent decision as to the law and the facts; and (3) That the Philippine court has or is likely to have power to enforce its decision.
2. APPLICATION TO LABOR CASES.
a. Case where doctrine was rejected.
Petitioners’ invocation of this principle was rejected in Pacific Consultants International Asia, Inc. v.
Schonfeld. Petitioners’ insistence was based on the fact that respondent is a Canadian citizen and was a repatriate. 1 In so rejecting petitioners’ contention, the Supreme Court cited the following reasons that do not warrant the application of the said principle: (1) the Labor Code does not include forum non conveniens as a ground for the dismissal of the complaint; and (2) the propriety of dismissing a case based on this principle requires a factual determination; hence, it is properly considered as a defense.
b. Case where doctrine was applied.
This doctrine was applied in the case of The Manila Hotel Corp. and Manila Hotel International Limited v. NLRC, where private respondent Marcelo Santos was an overseas worker employed as a printer in a 2 printing press in the Sultanate of Oman when he was directly hired by the Palace Hotel, Beijing, People’s Republic of China to work in its print shop. This hotel was being managed by the Manila Hotel International Ltd., a foreign entity registered under the laws of Hong Kong. Later, he was terminated due to retrenchment occasioned by business reverses brought about by the political upheaval in China (referring to the Tiananmen Square incident) which severely affected the hotel’s operations.
In holding that the NLRC was a seriously inconvenient forum, the Supreme Court noted that the main aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign elements. The only link that the Philippines has with the case is that the private respondent employee (Marcelo Santos) is a Filipino citizen. The Palace Hotel and MHICL are foreign corporations. Consequently, not all cases involving Filipino citizens can be tried here. Respondent employee was hired directly by the Beijing Palace Hotel, a foreign employer, through correspondence sent to him while he was working at the Sultanate of Oman. He was hired without the intervention of the POEA or any authorized recruitment agency of the government. Hence, the NLRC is an inconvenient forum given that all the incidents of the case - from the time of recruitment, to employment to dismissal - occurred outside the Philippines. The inconvenience is compounded by the fact that the proper defendants, the Palace Hotel and MHICL, are not nationals of the Philippines. Neither are they “doing business in the Philippines.” Likewise, the main witnesses, Mr. Shmidt (General Manager of the Palace Hotel) and Mr. Henk (Palace Hotel’s Manager) are non-residents of the Philippines.
Neither can an intelligent decision be made as to the law governing the employment contract as such was perfected in foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the place where the contract was made). It must be noted that the employment contract was not perfected in the Philippines.
Private respondent employee signified his acceptance thereof by writing a letter while he was in the Sultanate of Oman. This letter was sent to the Palace Hotel in the People’s Republic of China. Neither can the NLRC determine the facts surrounding the alleged illegal dismissal as all acts complained of took place in Beijing, People’s Republic of China. The NLRC was not in a position to determine whether the Tiananmen Square incident truly adversely affected the operations of the Palace Hotel as to justify respondent employee’s retrenchment.
Even assuming that a proper decision could be reached by the NLRC, such would not have any binding effect against the employer, the Palace Hotel, which is a corporation incorporated under the laws of China and was not even served with summons. Jurisdiction over its person was not acquired. This is not to say that Philippine courts and agencies have no power to solve controversies involving foreign employers. Neither could it be said that the Supreme Court does not have power over an employment contract executed in a foreign country. If the respondent employee were an “overseas contract worker”, a Philippine forum, specifically the POEA, not the NLRC, would protect him. He is not an “overseas contract worker”, a fact which he admits with conviction.
XI-F.
CONSTITUTIONALITY OF LABOR CONTRACT STIPULATIONS 1. THE HALAGUEÑA DOCTRINE.
In Halagueńa v. Philippine Airlines, Inc., it was pronounced that it is not the Labor Arbiter but the regular 3
In Halagueńa v. Philippine Airlines, Inc., it was pronounced that it is not the Labor Arbiter but the regular 3