G.R. No.

186621 : March 12, 2014

SOUTH EAST INTERNATIONAL RATTAN, INC. and/or ESTANISLAO AGBAY, Petitioners, v. JESUS J.
COMING, Respondent.

VILLARAMA, JR., J.:

FACTS:

Petitioner South East International Rattan, Inc. (SEIRI) is a domestic corporation engaged in the business of
manufacturing and exporting furniture to various countries with principal place of business at Paknaan,
Mandaue City, while petitioner EstanislaoAgbay, as per records, is the President and General Manager of
SEIRI.

Respondent Jesus J. Coming filed a complaint for illegal dismissal, underpayment of wages, non-payment
of holiday pay, 13th month pay and service incentive leave pay, with prayer for reinstatement, back wages,
damages and attorney fees against Petitioner.

Respondent alleged that on March 17, 1984, petitioners hired him as Sizing Machine Operator. He worked
from 8:00 a.m. to 5:00 p.m. At first, his compensation was on span class="SpellE">pakiaobasis but sometime
in June 1984, it was fixed at P150.00 per day paid to him on a weekly basis. In 1990, without any apparent
reason, his employment was interrupted as he was told by petitioners to resume work in two months time.
Being an uneducated person, respondent was persuaded by the management as well as his brother not to
complain, as otherwise petitioners might decide not to call him back for work. Fearing such consequence,
respondent accepted his fate. Nonetheless, after two months he reported back to work upon order of
management.

Despite being an employee for many years with his work performance never questioned by petitioners,
respondent was dismissed on January 1, 2002 without lawful cause. He was told that he will be terminated
because the company is not doing well financially and that he would be called back to work only if they need
his services again. Respondent waited for almost a year but petitioners did not call him back to work. He filed
the complaint before the regional arbitration branch.

As their defense, petitioners denied having hired respondent asserting that SEIRI was incorporated only in
1986, and that respondent actually worked for SEIRI furniture suppliers because when the company started
in 1987 it was engaged purely in buying and exporting furniture and its business operations were suspended
from the last quarter of 1989 to August 1992. They stressed that respondent was not included in the list of
employees submitted to the Social Security System (SSS). Moreover, respondent brother, Vicente Coming,
executed an affidavit8 in support of petitionersposition while Allan Mayol and Faustino Apondarissued
notarized certifications9 that respondent worked for them instead.

The Labor Arbiter ruled that respondent is a regular employee of SEIRI and that the termination of his
employment was illegal.

Petitioners appealed to the National Labor Relations Commission (NLRC)-Cebu City. The NLRC set aside
the decision of the LA compelling the respondent to file a petition for certiorari under Rule 65 before the Court
of Appeals. The CA ruled in favor of the respondent and declared that there existed an employer-employee
relationship between petitioners and respondent who was dismissed without just and valid cause. Petitioners
moved for reconsideration but the same was denied. Hence, the present petition for review on certiorari.

ISSUE: Whether or not there exists an employer-employee relationship between the petitioners and the
respondent?

HELD: The Court sustains that Decision of the Court of Appeals.

LABOR LAW: employer-employee relationship

In order to establish the existence of an employer-employee relationship, the four-fold test is used, to wit: (1)
the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and
(4) the power to control the employee conduct, or the so-called ontrol test.

In resolving the issue of whether such relationship exists in a given case, substantial evidence or that amount
of relevant evidence, which a reasonable mind might accept, as adequate to justify a conclusion is sufficient.

The petitioners presented the following to support their stance that respondent is not their employee: (1)
Employment Reports to the SSS from 1987 to 2002; (2) the Certifications issued by Mayol and Apondar; (3)
two affidavits of Vicente Coming; (4) payroll sheets (1999-2000); (5) individual pay envelopes and employee
earnings records (1999-2000); (6) and affidavit of Angelina Agbay(Treasurer and Human Resources Officer).

The respondent, on the other hand, submitted the affidavit executed by Eleoterio Brigoli, Pedro Brigoli,
Napoleon Coming, EfrenComing and Gil Coming who all attested that respondent was their co-worker at
SEIRI.

The Court in Tan v. Lagrama, 436 Phil. 190, held that the fact that a worker was not reported as an employee
to the SSS is not conclusive proof of the absence of employer-employee relationship. Otherwise, an employer
would be rewarded for his failure or even neglect to perform his obligation. Nor does the fact that respondent
name does not appear in the payrolls and pay envelope records submitted by petitioners negate the existence
of employer-employee relationship.

As a regular employee, respondent enjoys the right to security of tenure under Article 279 of the Labor Code
and may only be dismissed for just or authorized causes. Otherwise, the dismissal becomes illegal.

Since respondent dismissal was without valid cause, he is entitled to reinstatement without loss of seniority
rights and other privileges and to his full back wages, inclusive of allowances and other benefits of their
monetary equivalent, computed from the time his compensation was withheld from him up to the time of his
actual reinstatement.

However, where reinstatement is no long feasible as an option, back wages shall be computed from the time
of the illegal termination up to the finality of the decision. As an alternative to this, separation pay equivalent
to one month salary for every year of service should likewise be awarded in case reinstatement is not
possible.

ABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION vs. PILIPINAS SHELL PETROLEUM COR
PORATION G.R. No. 170007, 7 April 2014

FACTS:

On the parties 41st meeting, the company proposed the declaration of a deadlock and recommended that t
he help of a third party be sought. The union filed a Notice of Strike in the NCMB, alleging bad faith bargaini
ng on the part of the company. The NCMB immediately summoned the parties for the mandatory conciliatio
n-mediation proceedings but the parties failed to reach an amicable settlement. The DOLE-
Sec assumed jurisdiction over the dispute of the parties. The Secretary ruled that the company is not guilty
of bargaining in bad faith and also proceeded to decide on the matter of the wage increase and other econo
mic issues of the new CBA.

The union questioned the Secretarys assumption of jurisdiction over the labor dispute between the union a
nd the company on the ground that the Secretary erred in assuming jurisdiction over the CBA case when i
t is not the subject matter of the notice of strike because the case was all about ULP in the form of bad fa
ith bargaining. For the union, the DOLE-
Sec should not have touched the issue of the CBA as there was no CBA deadlock at that time, and should
have limited the assumption of jurisdiction to the charge of unfair labor practice for bargaining in bad faith

ISSUE:

Whether or not the Secretary of Labor and Employments assumption of jurisdiction is limited to the subject
of strike.

RULING: No. The labor dispute between the union and the company concerned the unresolved matters bet
ween the parties in relation to their negotiations for a new CBA. The power of the DOLE-
Sec to assume jurisdiction over this dispute includes and extends to all questions and controversies arising
from the said dispute, such as, but not limited to the unions allegation of bad faith bargaining. It also includ
es and extends to the various unresolved provisions of the new CBA such as compensation, particularly the
matter of annual wage increase or yearly lump sum payment in lieu of such wage increase, whether or not
there was deadlock in the negotiations.

As there is already an existing controversy on the matter of wage increase, the DOLE-
Sec need not wait for a deadlock in the negotiations to take cognizance of the matter. That is the significan
ce of the power of the DOLE-
Sec under Article 263(g) of the Labor Code to assume jurisdiction over a labor dispute causing or likely to c
ause a strike or lockout in an industry indispensable to the national interest. Article 263(g) is both an extraor
dinary and a preemptive power to address an extraordinary situation a strike or lockout in an industry indi
spensable to the national interest. This grant is not limited to the grounds cited in the notice of strike or lock
out that may have preceded the strike or lockout; nor is it limited to the incidents of the strike or lockout that
in the meanwhile may have taken place. As the term assume jurisdiction connotes, the intent of the law is
to give the Labor Secretary full authority to resolve all matters within the dispute that gave rise to or which
arose out of the strike or lockout; it includes and extends to all questions and controversies arising from or r
elated to the dispute, including cases over which the labor arbiter has exclusive jurisdiction

19. Temic Automotive Phils. vs. Cantos, GR No. 200729, September 29, 2014

FACTS:

Respondent Renato M. Cantos (Cantos) filed a complaint for illegal dismissal against petitioner Temic
Automotive (Phils.), Inc. (Temic). Cantos started his employment with Temic as Special Projects Officer of
the company's Materials Department. He was appointed Purchasing & Import-Export Manager (Purchasing
Manager) of the Logistics Department. He was named Warehouse & Import-Export Manager (Wimpex
Manager), the last position he held before he was allegedly dismissed illegally. Temic is a member firm of
Continental Corporation, a multi national company (with head office in Germany), with over sixty facilities
worldwide. A team from the head office audited Temic's operations. The audit team allegedly discovered
several irregularities, particularly with respect to Temic's purchasing transactions supposedly attended by
"fraudulent activities." Some purchase orders (POs), it was claimed, were ensured to go to some suppliers,
thereby systematically avoiding a competitive tender process. It stressed that initial findings indicated that
Cantos, as former Purchasing Manager, "was likely involved in said transactions."

Temic issued a Show Cause and Preventive Suspension Notice to Cantos, requiring him to explain in writing
several infractions which he allegedly committed during his stint as Purchasing Manager. Allegedly, Cantos
failed to meet the required number of purchase quotations, in violation of paragraph 10.6.1 of FV 9-F0158
under which purchases of all articles must conform with Continental Temic Electronics (Phils.), Inc. (CTEPI,)
Procurement Policy and that of Temic as a general rule. Cantos would claim that from 2005 to early 2008,
he was tasked to also serve the Purchasing Department of CTEPI (without additional compensation), a sister
firm of Temic and that it was in relation with his work in CTEPI that his dismissal was chiefly based. He would
also claim that the purchasing procedures are essentially the same for CTEPI and for Temic, except that in
CTEPI's case, the signature of the GM is not required for the Process Deviation Temporary Authority (PDTA).
Temic then conducted an administrative investigation where Cantos appeared, together with his counsel.
Temic issued a notice of termination of employment to Cantos, with immediate effect, on grounds of loss of
trust and confidence. It stressed that while Cantos initially denied any wrongdoing, he eventually admitted
having bypassed some purchasing procedures and/or local controls, although allegedly due to simple
oversight on his part. It added that after a careful deliberation and based on his own admission, as well as
the evidence, it had been established that he committed the acts he was charged with.

ISSUE:

WON the CA erred in ruling and declaring that Cantos had been illegally dismissed.

RULING:

We deny the petition for patent lack of merit. Like the CA, we are convinced that the NLRC committed grave
abuse of discretion in upholding Cantos' dismissal. We find no substantial evidence in the records in support
of its ruling. Tt is the employer's burden to prove that the dismissal was for a just or authorized cause. Temic
failed to discharge this burden of proof in Cantos' case.

First. The POs Temic offered in evidence to prove the principal charge against Cantos pertained to its sister
company CTEPI. It is puzzling that Temic did not bother to explain why it proceeded against Cantos based
on purchase transactions entered into by CTEPI and not by itself; it did not also explain the precise
relationship between it and CTEPI with respect to the POs in question. Thus, and apparently without being
aware that it was referring to CTEPI's purchasing procedures, it faulted Cantos for resorting to the PDTAs
without the signature and approval of the GM. Under Temic rules, the GM approves and signs the PDTA; it
is not a requirement under CTEPI rules.

Second. The foregoing notwithstanding and, as the CA declared, nowhere in the records is there evidence
that directly pointed to Cantos as having deliberately violated the company procedures for the procurement
of services and materials by allowing the proliferation of PDTAs. Other than the fact that Cantos was the
Purchasing Manager at the time and was a signatory to the PDTAs in question, we find no other indication
of his involvement in the execution of the subject PDTAs. Indeed, there is no evidence on record that it was
Cantos who caused the execution of the subject PDTAs or that he did it for his personal gain or in collusion
with Navarro and Balita of CTEPIs Manufacturing Department who were suspected to be involved in
fraudulent purchase transactions discovered by the audit team from Germany in favor of certain suppliers. In
fact, as the records show, Temic never refuted Cantos' submission that under the purchasing procedures of
both Temic and CTEPI, a PDTA starts at an end-user department and that the PDTAs in question came from
the Manufacturing Department as the end-user.

Third. Temic's contention that Cantos made an admission of guilt during the administrative investigation
likewise has no evidentiary support. It could have been done by simply presenting the minutes of the
investigation. No such investigation minutes were ever presented, only an attendance sheet. To our mind,
the minutes of the investigation are crucial, especially since Cantos has persistently denied that he made the
admission of wrongdoing during the investigation. Ignacio's affidavit, as well as that of Human Resource
Manager Del Rosario in the same tenor, cannot substitute for the minutes of the investigation whose absence
in the evidence presented remains unexplained.
 18. Montinola vs. Philippine Airlines, GR No.198656, September 8, 2014
FACTS:

In the case at bar, petitioner is a flight attendant of PAL, respondent. Montinola and other flight crew members were
subjected to custom searches in Honolulu, Hawaii, USA. Items from the airline were recovered from the flight crew by
customs officials. Nancy Graham), US Customs and Border Protection Supervisor, sent an email to PAL regarding the
search. The email7 contained a list of PAL flight crew members involved in the search and the items recovered. This
was done by enumerating the employees subject of the search and separately listing the items recovered from all the
employees subjected to search.

PAL conducted an investigation. Montinola was among those implicated because she was mentioned in Grahams emai.

PAL asked Montinola to comment on the same which Montinola did in a hand written explanation 3 days therefrom
stating that she did not take anything. There was a clarificatory hearing held. Montinola alleged that her counsel objected
during the clarificatory hearing regarding PALs failure to specify her participation in the alleged pilferage. 16 Atty. Pascual
threatened Montinola that a request for clarification would result in a waiver of the clarificatory hearing. 17 This matter
was not reflected in the transcript of the hearing.18 Despite her counsels objections, Montinola allowed the clarificatory
hearings to proceed because she wanted to extend her full cooperation [in] the investigation[s]. During the hearing,
Montinola admitted that in Honolulu, US customs personnel conducted a search of her person. At that time, she had in
her possession only the following food items: cooked camote, 3-in-1 coffee packs, and Cadbury hot chocolate. Thus
PAL found her guilty and ordered her suspended for 1 year.

Montinola questioned her suspension with the Labor Arbiter. The Labor Arbiter 26 found her suspension illegal, finding
that PAL never presented evidence that showed Montinola as the one responsible for any of the illegally taken airline
items.28 The Labor Arbiter ordered Montinolas reinstatement with backwages, inclusive of allowances and benefits. In
addition, because the records are replete with substantial evidence that the circumstances leading to complainants
one-year suspension without pay are characterized by arbitrariness and bad faith on the part of respondents. The totality
of respondents acts clearly shows that complainant had been treated unfairly and capriciously, for which complainant
should be awarded moral damages in the amount of P100,000.00 and exemplary damages also in the amount of
P100,000.00.31 The Labor Arbiter also awarded attorneys fees to Montinola because she was forced to litigate and
incur expenses to protect [her] rights

NLRC affirmed the finds of the Labor Arbiter as well as the imposition of moral and exemplary damages and attorneys
fees. However, Court of Appeals deleted the said awards even if it found the suspension of the employee was justified.
This was because Court of Appeals found that there is no showing that PAL was moved by any ill will or motive in
suspending private respondent. According to the Court of Appeals, petitioner gave private respondent every opportunity
to refute the charges against her and to present her side as part of due process. These negate the existence of bad
faith on the part of petitioner. Furthermore, the Court of Appeals found the award of attorneys fees improper. The award
of attorneys fees was merely cited in the dispositive portion of the decision without the RTC stating any legal or factual
basis for said award.

Montinola thus questions the decision of the Court of Appeals. Montinola claims that she is entitled to moral damages
because her illegal suspension was attended by bad faith, causing her to suffer mental anguish, fright, serious anxiety,
and moral shock.46 Furthermore, the illegal suspension tarnished her good standing. Montinola underscores that the
investigation against her was conducted in a hasty, impetuous, harsh and unjust 50 manner. She was not properly
apprised of the charges against her.51 She requested for proper notice of the acts violative of PALs Code of Discipline.
Instead of giving proper notice, PAL threatened that she would be waiving her right to a clarificatory hearing if she
insisted on her request.5

The claim for exemplary damages is anchored on Montinolas belief that such damages are designed to permit the
courts to mould behaviour that has socially deleterious consequences, and their imposition is required by public policy
to suppress the wanton acts of the offender. 55 In Montinolas view, PAL suspended her in a wanton, oppressive, and
malevolent manner.

Finally, Montinola argues that she is entitled to attorneys fees because she was forced to litigate. In Article 2208,
paragraph (2) of the Civil Code, individuals forced to litigate may ask for attorneys fees.

ISSUE:

WON Montinolas illegal suspension entitled her to an award of moral and exemplary damages and attorneys fees

RULING:

Montinola is entitled to moral and exemplary damages. She is also entitled to attorneys fees.
I. With regard to the claim for moral damages:

Security of tenure of workers is not only statutorily protected, it is also a constitutionally guaranteed right. 61 Thus, any
deprivation of this right must be attended by due process of law. 62 This means that any disciplinary action which affects
employment must pass due process scrutiny in both its substantive and procedural aspects. The constitutional protection
for workers elevates their work to the status of a vested right. It is a vested right protected not only against state action
but against the arbitrary acts of the employers as well. [t]he right of a person to his labor is deemed to be property within
the meaning of constitutional guarantees.

Suspension from work is prima facie a deprivation of this right. Thus, termination and suspension from work must be
reasonable (with just and authorized causes) to meet the constitutional requirement of due process of law.

Due process requirement is met when: First, the employer furnishes the employee with a written notice containing the
cause for termination. Second, the employer gives the employee an opportunity to be heard. This could be done either
through a position paper or through a clarificatory hearing.66 The employee may also be assisted by a representative or
counsel. Finally, the employer must give another written notice apprising the employee of its findings and the penalty to
be imposed against the employee, if any.

In this case, PAL complied with procedural due process as laid out in Article 277, paragraph (b) of the Labor Code. PAL
issued a written notice of administrative charge, conducted a clarificatory hearing, and rendered a written decision
suspending Montinola. However, we emphasize that the written notice of administrative charge did not serve the purpose
required under due process. PAL did not deny her allegation that there would be a waiver of the clarificatory hearing if
she insisted on a specific notice of administrative charge. With Montinola unable to clarify the contents of the notice of
administrative charge, there were irregularities in the procedural due process accorded to her.

Further, there was no substantial evidence (which is required in administrative investigations) to show that there was
just cause for Montinolas dismissal since PAL merely relied on these pieces of information in finding administrative
liability against Montinola: 1) a list of offenses found in PALs Code of Discipline that Montinola allegedly violated; 2) a
list of flight crew members that were checked at the Honolulu airport; and 3) a list of all items confiscated from all these
flight crew members. The lists are not sufficient to show the participation of any of the flight crew members, least of all
Montinola. None of the evidence presented show that the customs officials confiscated any of these items from her.

Labor Arbiters are authorized by law to award moral and exemplary damages according to Article 217 of the Labor
Code. Moral damages in labor cases cannot be justified solely upon the premise that the employer fired his employee
without just cause or due process. Additional facts must be pleaded and proven to warrant the grant of moral damages
under the Civil Code, these being, the 1. act of dismissal was attended by bad faith or fraud, or 2. was oppressive to
labor, or 3. done in a manner contrary to morals, good customs, or public policy; and, of course, that social humiliation,
wounded feelings, grave anxiety, etc., resulted therefrom.

PALs actions in implicating Montinola and penalizing her for no clear reason show bad faith. PALs denial of her request
to clarify the charges against her shows its intent to do a wrongful act for moral obliquity. If it were acting in good faith,
it would have gathered more evidence from its contact in Honolulu or from other employees before it started pointing
fingers. PAL should not have haphazardly implicated Montinola and denied her livelihood even for a moment.

PAL apparently granted Montinola procedural due process by giving her a notice of administrative charge and
conducting a hearing. However, this was more apparent than real. The notice of administrative charge did not specify
the acts committed by Montinola and how these acts violated PALs Code of Discipline. The notice did not state which
among the items confiscated by the US customs officials were originally found in Montinolas possession. Worse, the
panel of PAL officers led by Atty. Pascual did not entertain any query to clarify the charges against her.

Moral damages are, thus, appropriate

II. Montinola is also entitled to exemplary damages.

Article 2229 of the Civil Code, [e]xemplary or corrective damages are imposed, by way of example or correction for the
public good, in addition to the moral, temperate, liquidated or compensatory damages.

Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is socially deleterious
in its consequence by creating negative incentives or deterrents against such behaviour. In labor cases, the court may
award exemplary damages if the dismissal was effected in a wanton, oppressive or malevolent manner.

It is socially deleterious for PAL to suspend Montinola without just cause in the manner suffered by her. Hence,
exemplary damages are necessary to deter future employers from committing the same acts.
III. Montinola is also entitled to attorneys fees.

ART. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than judicial costs, cannot be
recovered, except:

(1) When exemplary damages are awarded; (2) When the defendants act or omission has
compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; (7)
In actions for the recovery of wages of household helpers, laborers and skilled workers

This case qualifies for the first, second, and seventh reasons thus justifying the award of attorneys fees to petitioner.

1. Amecos Innovations Inc. et al., vs. Lopez, GR No. 178055, July 2, 2014

FACTS:

Amecos Inc. is a corporation engaged in selling products made by its President and Antonio Mateo. Amecos received a
subpoena in connection with a complaint filed by the SSS for alleged delingquency in the remittance of contributions in
violation of Sec 22a and 22d in relation to Sec 28e of the SSS law. Amecos explained that it was respondent Eliza Lopez
who is at fault. That upon hiring, respondent to refuse to provide the corp. her SSS number and to be deducted SSS
contributions that is why Amecos no longer enrolled Lopez with the SSS neither did it deduct for contributions until she
was terminated. The corporation settled with SSS.

Thereafter, Amecos demanded respondent Lopez for an amount representing her share in the SSS contributions. Since
Lopez did not comply with the demand, Amecos filed a complaint for sum of money and damages in the MeTC.
Respondent on the other hand, filed an Answer with a motion to dismiss, on the ground that the court do not have
jurisdiction over the issue for it arose out of their employer-employee relationship.

MeTC dismissed the case.

Appealed to the RTC. The RTC affirmed the view taken by the MeTC that under Article 217(a)(4) of the Labor Code,
claims for actual, moral, exemplary and other forms of damages arising from employer-employee relationship are under
the jurisdiction of the Labor Arbiters or the National Labor Relations Commission (NLRC); that since petitioners and
respondent were in an employer-employee relationship at the time, the matter of SSS contributions was thus an integral
part of that relationship; and as a result, petitioners cause of action for recovery of damages from respondent falls under
the jurisdiction of the Labor Arbiters, pursuant to Article 217(a)(4) of the Labor Code. Petitioners filed a Motion for
Reconsideration which the RTC denied

Court of Appeals dismissed the appeal.

ISSUES:

WON the regular civil court and not the labor arbiter or the national labor relations commission has jurisdiction over
claim[s] for reimbursement arising from employer-employee relations.

RULING:

This Court holds that as between the parties, Article 217(a)(4) of the Labor Code is applicable. Said provision bestows
upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employer-employee
relations. The observation that the matter of SSS contributions necessarily flowed from the employer-employee
relationship between the parties shared by the lower courts and the CA is correct; thus, petitioners claims should
have been referred to the labor tribunals. In this connection, it is noteworthy to state that "the Labor Arbiter has
jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the Civil Code.

2. Indophil Textile Mills Inc. vs. Engr. Adviento, GR No. 171212, August 4, 2014

FACTS:

Salvador Adviento is a civil engineer employed by Indophil Textile. He was diagnosed with Chronic Poly Sinusitis, and
allergic rhinitis. He averred that it is because the Emloyer turn a deaf ear to their plight of health hazards attendant in
his office. He tried to apply in another company but when they learn of his condition, they turn him down.

He then filed a case of illegal dismissal with payment of backwages with the NLRC. He also filed a case for damages in
the RTC. Respondent alledged that it was by reason of gross negligence of petitioner that he acquired such occupational
disease. A motion to dismiss was filed by the Indophil Textile on the ground that: (1) the RTC has no jurisdiction over
the subject matter of the complaint because the same falls under the original and exclusive jurisdiction of the Labor
Arbiter (LA) under Article 217(a)(4) of the Labor Code; and (2) there is another action pending with the Regional
Arbitration Branch III of the NLRC in San Fernando City, Pampanga, involving the same parties for the same cause.

The RTC held that petitioners alleged failure to provide its employees with a safe, healthy and workable environment is
an act of negligence, a case of quasi-delict. As such, it is not within the jurisdiction of the LA under Article 217 of the
Labor Code. On the matter of dismissal based on lis pendencia, the RTC ruled that the complaint before the NLRC has
a different cause of action which is for illegal dismissal and prayer for backwages, actual damages, attorneys fees and
separation pay due to illegal dismissal while in the present case, the cause of action is for quasi-delict.

Petitioner then filed a Petition for Certiorariwith the CA on the ground that the RTC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in upholding that it has jurisdiction over the subject matter of the complaint
despite the broad and clear terms of Article 217 of the Labor Code, as amended. However, the CA ruled that it was the
regular courts that has jurisdiction

In its attempt to overturn the assailed Decision and Resolution of the CA, Indophil argues that respondents claim for
damages is anchored on the alleged gross negligence of petitioner as an employer to provide its employees, including
herein respondent, with a safe, healthy and workable environment; hence, it arose from an employer-employee
relationship. The fact of respondents employment with petitioner as a civil engineer is a necessary element of his cause
of action because without the same, respondent cannot claim to have a right to a safe, healthy and workable
environment. Thus, exclusive jurisdiction over the same should be vested in the Labor Arbiter and the NLRC pursuant
to Article 217(a)(4) of the Labor Code of the Philippines.

ISSUE:

WON the regular courts has jurisdiction on damages resulting from gross negligence of employe

RULING:

The jurisdiction of the LA and the NLRC is outlined in Article 217 of the Labor Code.

While we have upheld the present trend to refer worker-employer controversies to labor courts in light of the aforequoted
provision, we have also recognized that not all claims involving employees can be resolved solely by our labor courts,
specifically when the law provides otherwise. For this reason, we have formulated the "reasonable causal connection
rule," wherein if there is a reasonable causal connection between the claim asserted and the employer-employee
relations, then the case is within the jurisdiction of the labor courts; and in the absence thereof, it is the regular courts
that have jurisdiction. The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs
sought by the plaintiffs. For if the Labor Code has no relevance, any discussion concerning the statutes amending it and
whether or not they have retroactive effect is unnecessary.

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. It results that the orders under revieware based on a wrong premise.

Not all disputes between an employer and his employees fall within the jurisdiction of the labor tribunals suchthat when
the claim for damages is grounded on the "wanton failure and refusal" without just cause of an employee to report for
duty despite repeated notices served upon him of the disapproval of his application for leave of absence, the same falls
within the purview of Civil Law. We differentiated between abandonment per se and the manner and consequent effects
of such abandonment and ruled that the first, is a labor case, while the second, is a civil law case.

Indeed, jurisprudence has evolved the rule that claims for damages under Article 217(a)(4) of the Labor Code, to be
cognizable by the LA, must have a reasonable causal connection with any of the claims provided for in that article. Only
if there is such a connection with the other claims can a claim for damages be considered as arising from employer-
employee relations.

In the case at bench, we find that such connection is nil.

True, the maintenance of a safe and healthy workplace is ordinarily a subject of labor cases. More, the acts complained
of appear to constitute matters involving employee-employer relations since respondent used to be the Civil Engineer
of petitioner. However, it should be stressed that respondents claim for damages is specifically grounded on petitioners
gross negligence to provide a safe, healthy and workable environment for its employees a case of quasi-delict.

When, as here, the cause of action is based on a quasi-delict or tort, which has no reasonable causal connection with
any of the claims provided for in Article 217, jurisdiction over the action is with the regular courts.
 1. Milan, et. al. vs National Labor Relations Commission, G.R. No. 202961, February 4, 2015

FACTS:

Petitioners are Solid Mills Inc.s (SMI) employees. They were allowed to occupy SMI Village. According to SMI, this was
out of liberality on the condition that they would vacate anytime SMI deems fit. Later, petitioners were informed that SMI
would cease its operations due to serious business losses and were also sent individual notices to vacate SMI Village.
They were required to sign a memorandum of agreement with release and quitclaim before their vacation and sick leave
benefits, 13th month pay, and separation pay would be released. Employees who signed were considered to have
agreed to vacate SMI Village. Petitioners refused to sign and demanded payment of their benefits. They then filed
complaints before the Labor Arbiter (LA). The LA ruled that SMI illegally withheld petitioners benefits and separation
pay. The NLRC partly affirmed the LAs decision and the CA ruled in favor of SMI.

ISSUE:

WON SMI can validly withhold petitioners benefits and separation pay until petitioners vacate SMIs property

RULING:

As a general rule, employers are prohibited from withholding wages from employees (Art. 116) and that there should be
no elimination or diminution of benefits (Art. 100). However, our law supports the employers institution of clearance
procedures before the release of wages. As an exception to the general rule, the Labor Code provides (art. 113) that an
employer can make deduction from wages in cases where the employer is authorized by law or regulations issued by
the Secretary of Labor and Employment.

The Civil Code provides that withholding of wages, except for a debt due, shall not be made by the employer (Art. 1706).
Debt in this case refers to any obligation due from the employee to the employer. It includes any accountability that
the employee may have to the employer. There is no reason to limit its scope to uniforms and equipment. More
importantly, the union representing petitioners and SMI agreed that the release of petitioners benefits shall be less
accountabilities. Accountability means obligation or debt. As long as the debt or obligation was incurred by virtue of
the employer-employee relationship, generally, it shall be included in the employees accountabilities that are subject to
clearance procedures.
The return of the propertys possession became an obligation or liability on the part of the employees when the employer-
employee relationship cased. Thus, SMI has the right to withhold petitioners wages and benefits because of this existing
liability. Such wages and benefits are not being reduced. They are subject only to the condition that the employees
return the properties to the employer consistent with the principle that no one shall be unjustly enriched or benefited at
the expense of another.