Article 217. JURISDICTION OF THE LABOR ARBITERS AND THE COMMISSION.

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. MONEY CLAIMS EXCEEDING P5,000.00
4. CLAIMS FOR ACTUAL, MORAL, EXEMPLARY AND OTHER FORMS OF
DAMAGES ARISING FROM EMPLOYER-EMPLOYEE RELATIONS; AND
5. CASES INVOLVING THE LEGALITY OF STRIKES AND LOCKOUTS.

NOTE: Claims for employees’ compensation, SSS, PhilHealth (Medicare) and

maternity benefits do not fall under the jurisdiction of the Labor Arbiter
because these fall under the jurisdiction of other government agencies.

Other cases:

a. Disputes involving legislated wage increases and wage distortion in

unorganized establishments not voluntarily settled by the parties pursuant to
RA No. 6727;
b. Contested case under the exception clause in Article 128(b) of the Labor Code
c. Enforcement of a compromise agreements when there is non-compliance by
any of the parties thereto, pursuant to Article 227 of the Labor Code;
d. Issuance of writ of execution to enforce decisions of Voluntary Arbitrators or
panel of Voluntary Arbitrators, in case of their absence or incapacity, for any
reason;
e. Money claims of OFWs arising out of employer-employee relationship or by
virtue of any law or contract, including claims death and disability benefits and
for actual, moral, exemplary and other forms of damages.
f. Other cases as may be provided by law.

If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;

Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;

Cases arising from any violation of Article 264 of this Code, including questions involving
the legality of strikes and lockouts; and

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.

The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.

Cases arising from the interpretation or implementation of collective bargaining agreements

and those arising from the interpretation or enforcement of company personnel policies
shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery
and voluntary arbitration as may be provided in said agreements. (As amended by Section
9, Republic Act No. 6715, March 21, 1989)

1. PEOPLE’S BROADCASTING SERVICE VS. SEC OF LABOR

FACTS :

Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department
of Labor and Employment (DOLE). for illegal deduction, nonpayment of service incentive leave,
13th month pay, premium pay for holiday and rest day and illegal diminution of benefits,
delayed payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth.

The DOLE Regional Director found that private respondent was an employee of petitioner, and
was entitled to his money claims.

When the matter was brought before the CA, where petitioner (Bombo Radyo) claimed that it
had been denied due process, it was held that petitioner was accorded due process as it had
been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the
matter.

In the Decision of this Court, the CA Decision was reversed and set aside, and the complaint
against petitioner was dismissed.

The National Labor Relations Commission (NLRC) was held to be the primary agency in
determining the existence of an employer-employee relationship. This was the interpretation
of the Court of the clause "in cases where the relationship of employer-employee still exists"
in Art. 128(b)

From this Decision, the Public Attorney’s Office (PAO) filed a Motion for Clarification of
Decision (with Leave of Court). The PAO sought to clarify as to when the visitorial and
enforcement power of the DOLE be not considered as co-extensive with the power to determine
the existence of an employer-employee relationship

The question now arises, may the DOLE make a determination of whether or not an employer-
employee relationship exists, and if so, to what extent?

HELD:

The previous conclusion must be revisited.

No limitation in the law was placed upon the power of the DOLE to determine the existence of
an employer-employee relationship. No procedure was laid down where the DOLE would only
make a preliminary finding, that the power was primarily held by the NLRC. The law did not say
that the DOLE would first seek the NLRC’s determination of the existence of an employer-
employee relationship, or that should the existence of the employer-employee relationship be
disputed, the DOLE would refer the matter to the NLRC. The DOLE, in determining the existence
of an employer-employee relationship, has a ready set of guidelines to follow, the same guide
the courts themselves use. The elements to determine the existence of an employment
relationship are: (1) the selection and engagement of the employee; (2) the payment of wages;
(3) the power of dismissal; (4) the employer’s power to control the employee’s conduct. The
use of this test is not solely limited to the NLRC

The DOLE, in determining the existence of an employer-employee relationship, has

a ready set of guidelines to follow, the same guide the courts themselves use. The
elements to determine the existence of an employment relationship are: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power
of dismissal; (4) the employer’s power to control the employees conduct. The use of
this test is not solely limited to the NLRC. The DOLE Secretary, or his or her
representatives, can utilize the same test, even in the course of inspection, making
use of the same evidence that would have been presented before the NLRC.

Article 218. Powers of the Commission. The Commission shall have the power and authority:

To promulgate rules and regulations governing the hearing and disposition of cases before it and its
regional branches, as well as those pertaining to its internal functions and such rules and regulations
as may be necessary to carry out the purposes of this Code; (As amended by Section 10, Republic
Act No. 6715, March 21, 1989)

To administer oaths, summon the parties to a controversy, issue subpoenas requiring the
attendance and testimony of witnesses or the production of such books, papers, contracts,
records, statement of accounts, agreements, and others as may be material to a just
determination of the matter under investigation, and to testify in any investigation or hearing
conducted in pursuance of this Code;
To conduct investigation for the determination of a question, matter or controversy within its
jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who
has been summoned or served with notice to appear, conduct its proceedings or any part thereof in
public or in private, adjourn its hearings to any time and place, refer technical matters or accounts to
an expert and to accept his report as evidence after hearing of the parties upon due notice, direct
parties to be joined in or excluded from the proceedings, correct, amend, or waive any error, defect
or irregularity whether in substance or in form, give all such directions as it may deem necessary or
expedient in the determination of the dispute before it, and dismiss any matter or refrain from further
hearing or from determining the dispute or part thereof, where it is trivial or where further
proceedings by the Commission are not necessary or desirable; and

To hold any person in contempt directly or indirectly and impose appropriate penalties therefor in
accordance with law.

A person guilty of misbehavior in the presence of or so near the Chairman or any member of the
Commission or any Labor Arbiter as to obstruct or interrupt the proceedings before the same,
including disrespect toward said officials, offensive personalities toward others, or refusal to be
sworn, or to answer as a witness or to subscribe an affidavit or deposition when lawfully required to
do so, may be summarily adjudged in direct contempt by said officials and punished by fine not
exceeding five hundred pesos (P500) or imprisonment not exceeding five (5) days, or both, if it be
the Commission, or a member thereof, or by a fine not exceeding one hundred pesos (P100) or
imprisonment not exceeding one (1) day, or both, if it be a Labor Arbiter.

The person adjudged in direct contempt by a Labor Arbiter may appeal to the Commission and the
execution of the judgment shall be suspended pending the resolution of the appeal upon the filing by
such person of a bond on condition that he will abide by and perform the judgment of the
Commission should the appeal be decided against him. Judgment of the Commission on direct
contempt is immediately executory and unappealable. Indirect contempt shall be dealt with by the
Commission or Labor Arbiter in the manner prescribed under Rule 71 of the Revised Rules of Court;
and (As amended by Section 10, Republic Act No. 6715, March 21, 1989)

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: Provided, That no temporary or permanent injunction in any case
involving or growing out of a labor dispute as defined in this Code shall be issued except after
hearing the testimony of witnesses, with opportunity for cross-examination, in support of the
allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and only
after a finding of fact by the Commission, to the effect:

That prohibited or unlawful acts have been threatened and will be committed and will be continued
unless restrained, but no injunction or temporary restraining order shall be issued on account of any
threat, prohibited or unlawful act, except against the person or persons, association or organization
making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the
same after actual knowledge thereof;

That substantial and irreparable injury to complainant’s property will follow;

That as to each item of relief to be granted, greater injury will be inflicted upon complainant by the
denial of relief than will be inflicted upon defendants by the granting of relief;

That complainant has no adequate remedy at law; and

That the public officers charged with the duty to protect complainant’s property are unable or
unwilling to furnish adequate protection.

Such hearing shall be held after due and personal notice thereof has been served, in such manner
as the Commission shall direct, to all known persons against whom relief is sought, and also to the
Chief Executive and other public officials of the province or city within which the unlawful acts have
been threatened or committed, charged with the duty to protect complainant’s property: Provided,
however, that if a complainant shall also allege that, unless a temporary restraining order shall be
issued without notice, a substantial and irreparable injury to complainant’s property will be
unavoidable, such a temporary restraining order may be issued upon testimony under oath,
sufficient, if sustained, to justify the Commission in issuing a temporary injunction upon hearing after
notice. Such a temporary restraining order shall be effective for no longer than twenty (20) days and
shall become void at the expiration of said twenty (20) days. No such temporary restraining order or
temporary injunction shall be issued except on condition that complainant shall first file an
undertaking with adequate security in an amount to be fixed by the Commission sufficient to
recompense those enjoined for any loss, expense or damage caused by the improvident or
erroneous issuance of such order or injunction, including all reasonable costs, together with a
reasonable attorney’s fee, and expense of defense against the order or against the granting of any
injunctive relief sought in the same proceeding and subsequently denied by the Commission.

The undertaking herein mentioned shall be understood to constitute an agreement entered into by
the complainant and the surety upon which an order may be rendered in the same suit or proceeding
against said complainant and surety, upon a hearing to assess damages, of which hearing,
complainant and surety shall have reasonable notice, the said complainant and surety submitting
themselves to the jurisdiction of the Commission for that purpose. But nothing herein contained shall
deprive any party having a claim or cause of action under or upon such undertaking from electing to
pursue his ordinary remedy by suit at law or in equity: Provided, further, That the reception of
evidence for the application of a writ of injunction may be delegated by the Commission to any of its
Labor Arbiters who shall conduct such hearings in such places as he may determine to be
accessible to the parties and their witnesses and shall submit thereafter his recommendation to the
Commission. (As amended by Section 10, Republic Act No. 6715, March 21, 1989

PAL VS. NLRC, MARCH 20, 1998

Private respondents (Ferdinand Pineda and Godofredo Cabling) are flight stewards of the petitioner.
Both were dismissed from the service for their alleged involvement in the April 3, 1993 currency
smuggling in Hong Kong.

Aggrieved by said dismissal, private respondents filed with the NLRC a petition for injunction praying
that:

"I. Upon filing of this Petition, a temporary restraining order be issued, prohibiting respondents
(petitioner herein) from effecting or enforcing the Decision dated Feb. 22, 1995, or to reinstate
petitioners temporarily while a hearing on the propriety of the issuance of a writ of preliminary
injunction is being undertaken;

"II. After hearing, a writ of preliminary mandatory injunction be issued ordering respondent to reinstate
petitioners to their former positions pending the hearing of this case, or, prohibiting respondent from
enforcing its Decision dated February 22,1995 while this case is pending adjudication;
"III. After hearing, that the writ of preliminary injunction as to the reliefs sought for be made
permanent, that petitioners be awarded full backwages, moral damages of PHP 500,000.00 each and
exemplary damages of PHP 500,000.00 each, attorney’s fees equivalent to ten percent of whatever
amount is awarded, and the costs of suit."

The NLRC issued the writ of injunction. In support of the issuance of the writ of temporary
injunction, the NLRC adopted the view that: (1) private respondents cannot be validly
dismissed on the strength of petitioner's Code of Discipline which was declared illegal by
this Court in the case of PAL, Inc. vs. NLRC, (G.R. No. 85985), promulgated August 13,
1993, for the reason that it was formulated by the petitioner without the participation of
its employees as required in R.A. 6715, amending Article 211 of the Labor Code; (2) the
whimsical, baseless and premature dismissals of private respondents which "caused
them grave and irreparable injury" is enjoinable as private respondents are left "with no
speedy and adequate remedy at law'"except the issuance of a temporary mandatory
injunction; (3) the NLRC is empowered under Article 218 (e) of the Labor Code not only to
restrain any actual or threatened commission of any or all prohibited or unlawful acts but
also 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;
and (4) the temporary mandatory power of the NLRC was recognized by this Court in the
case of Chemo-Technicshe Mfg., Inc. Employees Union,DFA, et.al. vs. Chemo-
Technische Mfg., Inc. [G.R. No. 107031, January 25,1993]. PAL moved for reconsideration on
the ground that has no jurisdiction to issue an injunction or restraining order since this may be issued
only under Article 218 of the Labor Code if the case involves or arises from labor disputes and thereby
divesting the labor arbiter of its original and exclusive jurisdiction over illegal dismissal cases .

Issue: W/N the NLRC acted with grave abuse of discretion on issuing the writ of injunction

Held:

Yes.

In labor cases, Article 218 of the Labor Code empowers the 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.

Complementing the above-quoted provision, Sec. 1, Rule XI of the New Rules of Procedure of the NLRC,
pertinently provides as follows:

"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.
From the foregoing provisions of law, the power of the NLRC to issue an injunctive writ originates from
"any labor dispute" upon application by a party thereof, which application if not granted "may cause
grave or irreparable damage to any party or render ineffectual any decision in favor of such party."

The term "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."

The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal.
This is clear from the allegations in the petition which prays for: reinstatement of private respondents;
award of full backwages, moral and exemplary damages; and attorney's fees. As such, the petition
should have been filed with the labor arbiter who has the original and exclusive jurisdiction to hear and
decide the following cases involving all workers, whether agricultural or non-agricultural:
(1) Unfair labor practice;
(2) Termination disputes;
(3) If accompanied with a claim for reinstatement, those cases that workers may file involving wages,
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 exceeding five thousand pesos (P 5,000.00), whether or not
accompanied with a claim for reinstatement.

The jurisdiction conferred by the foregoing legal provision to the labor arbiter 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 the Secretary of Labor and Employment or the
NLRC exercises the power of compulsory arbitration, or the parties agree to submit the matter to
voluntary arbitration pursuant to Article 263 (g) of the Labor Code.

On the other hand, the NLRC shall have exclusive appellate jurisdiction over all cases decided by labor
arbiters as provided in Article 217(b) of the Labor Code. In short, the jurisdiction of the NLRC in illegal
dismissal cases is appellate in nature and, therefore, it cannot entertain the private respondents'
petition for injunction which challenges the dismissal orders of petitioner. Article 218(e) of the Labor
Code does not provide blanket authority to the NLRC or any of its divisions to issue writs of injunction,
considering that Section 1 of Rule XI of the New Rules of Procedure of the NLRC makes injunction only
an ancillary remedy in ordinary labor disputes.