LABOR RELATIONS
Atty. R. Mercader
Compiled Case Doctrines
NB: This is a compilation of case doctrines directly lifted from cases and case digests. Quality of the content is assured, but
nonetheless, use with discretion. Hope this helps :)
I. JURISDICTION AND REMEDIES
A. Existence of Employer-Employee Relationship
1. Javier v. Fly Ace Corporation
G.R. NO. 192558
February 15, 2012
No particular form of evidence is required to prove the existence of such employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be admitted. The rule of thumb remains: the onus
probandi falls on petitioner to establish or substantiate such claim by the requisite quantum of evidence. Whoever
claims entitlement to the benefits provided by law should establish his or her right thereto x x x.
2. Southeast International Rattan, Inc v. Coming
G.R. NO. 126297
February 11, 2008
To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the
four-fold test, 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’s conduct, or the so-called "control test."
In resolving the issue of whether such relationship exists in a given case, substantial evidence – that amount of
relevant evidence which a reasonable mind might accept as adequate to justify a conclusion – is sufficient.
Although no particular form of evidence is required to prove the existence of the relationship, and any competent
and relevant evidence to prove the relationship may be admitted, a finding that the relationship exists must
nonetheless rest on substantial evidence.
3. Tenazas v. R. Villegas Taxi Transportation
GR NO. 192998
April 2, 2014
There is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant evidence
to prove the relationship may be admitted. Identification cards, cash vouchers, social security registration,
appointment letters or employment contracts, payrolls, organization charts, and personnel lists, serve as evidence
of employee status. "[T]he burden of proof rests upon the party who asserts the affirmative of an issue."
4. Sagun v. ANZ Global
GR NO. 220399
August 22, 2016
An employment contract, like any other contract, is perfected at the moment the parties come to agree upon its
terms and conditions, and thereafter, concur in the essential elements thereof. In this relation, the contracting
parties may establish such stipulations, clauses, terms, and conditions as they may deem convenient, provided
they are not contrary to law, morals, good customs, public order or public policy.
Accordingly, petitioner's employment with ANZ depended on the outcome of his background check, which
partakes of the nature of a suspensive condition, and hence, renders the obligation of the would-be employer, i.e.,
ANZ in this case, conditional. While a contract may be perfected in the manner of operation described above, the
efficacy of the obligations created thereby may be held in suspense pending the fulfillment of particular conditions
agreed upon. In other words, a perfected contract may exist, although the obligations arising therefrom if
premised upon a suspensive condition would yet to be put into effect. Thus, until and unless petitioner complied
with the satisfactory background check, there exists no obligation on the part of ANZ to recognize and fully accord
him the rights under the employment contract.
Labor Law 2 (Labor Relations) | Atty. Mercader
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5. LVN Pictures v. Philippine Musicians Guild
110 Phil. 725
January 28, 1961
To determine whether a person who performs work for another is the latter's employee or an independent
contractor, the National Labor Relations relies on 'the right to control' test. Under this control test, an
employer-employee relationship exist where the person for whom the services are performed reserves the right to
control not only the end to be achieved, but also the manner and means to be used in reaching the end ​(United
Insurance Company, 108, NLRB No. 115)​. Notwithstanding that the employees are called independent
contractors', the Board will hold them to be employees under the Act where the extent of the employer's control
over them indicates that the relationship is in reality one of employment.
6. Paguio Transport, Corp. v. NLRC
GR NO. 119500
August 28, 1998
Boundary system is that of employer-employee and not of lessor-lessee. Under the “boundary system” the drivers
do not receive fixed wages; all the excess in the amount of boundary was considered his income but it is not
sufficient to withdraw the relationship between them from that of employer and employee. In the lease of
chattels[,] the lessor loses complete control over the chattel leased . . . . In the case of jeepney owners/operators
and jeepney drivers, the former exercise supervision and control over the latter.
7. Teng v. Pahagac
GR NO. 169704
November 17, 2010
As a policy, the Labor Code prohibits labor-only contracting:
Art. 106. Contractor or Subcontractor
xxx
There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment
in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons
are performing activities which are directly related to the principal business of such employer.
Section 5 of the DO No. 18-02,[46] which implements Article 106 of the Labor Code, provides:
Section 5. Prohibition against labor-only contracting. - Labor-only contracting is hereby declared prohibited. For this purpose,
labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal, and any of the following elements are present:
(i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service
to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing
activities which are directly related to the main business of the principal; or
(ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee.
A finding that the maestros are labor-only contractors is equivalent to a finding that an employer-employee
relationship exists between Teng and the respondent workers. As regular employees, the respondent workers are
entitled to all the benefits and rights appurtenant to regular employment.
8. Dy Keh Beng v. International Labor and Marine Union of the Philippines GR NO. L-32245
May 25,
1979
An employer-employee relationship exists, using the control test, exists “where the person for whom the services
are performed reserves a right to control not only the end to be achieved but also the means to be used in
reaching such end.” It should be borne in mind that the control test calls merely for the existence of the right to
control the manner of doing the work, not the actual exercise of the right.
“Circumstances must be construed to determine indeed if payment by the piece is just a method of compensation
and does not define the essence of the relation. x x x and units of work are in establishments like respondent (sic)
just yardsticks whereby to determine rate of compensation, to be applied whenever agreed upon. We cannot
construe payment by the piece where work is done in such an establishment as to put the worker completely at
liberality to turn him out and take in another at pleasure.” Lastly, the court noted the judicial notice in previous
case of ‘pakyaw’ system as generally practiced in our country, is, in fact, a labor contract between employers and
employees, between capitalists, and laborers.
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9. Insular Life Assurance Company v. NLRC and Basiao
GR NO. 84484
November 15, 1989
It should x x x be obvious that not every form of control that the hiring party reserves to himself over the conduct
of the party hired in relation to the services rendered may be accorded the effect of establishing an
employer-employee relationship between them in the legal or technical sense of the term.
Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the
mutually desired result without dictating the means or methods to be employed in attaining it, and those that
control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim
only to promote the result, create no employer-employee relationship unlike the second, which address both the
result and the means used to achieve it.
The distinction acquires particular relevance in the case of an enterprise affected with public interest, as is the
business of insurance, and is on that account subject to regulation by the State with respect, not only to the
relations between insurer and insured but also to the internal affairs of the insurance company. Rules and
regulations governing the conduct of the business are provided for in the Insurance Code and enforced by the
Insurance Commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of
rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it
requires or prohibits. None of these really invades the agent’s contractual prerogative to adopt his own selling
methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish an
employer-employee relationship between him and the company.
10. Tongko v. Manulife
GR NO. 167622
November 7, 2009
If the specific rules and regulations that are enforced against insurance agents or managers are such that would
directly affect the mean and methods by which such agents or managers would achieve the objectives set by the
insurance company, they are employees of the insurance company.
NB: Motion for Reconsideration (June 29, 2010)
The business of insurance is a highly regulated commercial activity in the country, in terms particularly of who can
be in the insurance business, who can act for and in behalf of an insurer, and how these parties shall conduct
themselves in the insurance business. Thus, under the Insurance Code, the agent must, as a matter of
qualification, be licensed and must also act within the parameters of the authority granted under the license and
under the contract with the principal. Rules regarding the desired results (e.g., the required volume to continue to
qualify as a company agent, rules to check on the parameters on the authority given to the agent, and rules to
ensure that industry, legal and ethical rules are followed) are built-in elements of control specific to an insurance
agency and should not and cannot be read as elements of control that attend an employment relationship
governed by the Labor Code.
The employer controls the employee both in the results and in the means and manner of achieving this result.
The principal in an agency relationship, on the other hand, also has the prerogative to exercise control over the
agent in undertaking the assigned task based on the parameters outlined in the pertinent laws. With particular
relevance to the present case is the provision that "In the execution of the agency, the agent shall act in
accordance with the instructions of the principal.​" This provision is pertinent for purposes of the necessary control
that the principal exercises over the agent in undertaking the assigned task, and is an area where the instructions
can intrude into the labor law concept of control so that minute consideration of the facts is necessary. The
provisions of the Insurance Code cannot be disregarded as this Code expressly envisions a principal-agent
relationship between the insurance company and the insurance agent in the sale of insurance to the public. For
this reason, we can take judicial notice that as a matter of Insurance Code-based business practice, an agency
relationship prevails in the insurance industry for the purpose of selling insurance.
NB: Motion for Reconsideration (January 25, 2011)
The Insurance Code provides definite parameters in the way an agent negotiates for the sale of the company’s
insurance products, his collection activities and his delivery of the insurance contract or policy. All these, read
without any clear understanding of fine legal distinctions, appear to speak of control by the insurance company
over its agents. They are, however, controls aimed only at specific results in undertaking an insurance agency,
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and are, in fact, parameters set by law in defining an insurance agency and the attendant duties and
responsibilities an insurance agent must observe and undertake. They do not reach the level of control into the
means and manner of doing an assigned task that invariably characterizes an employment relationship as defined
by labor law.
To reiterate, guidelines indicative of labor law "control" do not merely relate to the mutually desirable result
intended by the contractual relationship; they must have the nature of dictating the means and methods to be
employed in attaining the result. Manulife’s codes of conduct, likewise, do not necessarily intrude into the
insurance agents’ means and manner of conducting their sales.
11. AFP Mutual Benefit Association v. NLRC GR NO. 102199
January 28, 1997
The significant factor in determining the relationship of the parties is the presence or absence of supervisory
authority to control the method and the details of performance of the service being rendered, and the degree to
which the principal may intervene to exercise such control. The presence of such power of control is indicative of
an employment relationship, while absence thereof is indicative of independent contractorship. In other words, the
test to determine the existence of independent contractorship is whether one claiming to be an independent
contractor has contracted to do the work according to his own methods and without being subject to the control of
the employer except only as to the result of the work.
The jurisdiction of labor arbiters and respondent Commission is set forth in Article 217 of the Labor Code. The
unifying element running through paragraphs (1) - (6) of said provision is the consistent reference to ​cases or
disputes arising out of or in connection with an employer-employee relationship. Without this critical element of
employment relationship, the labor arbiter and respondent Commission can never acquire jurisdiction over a
dispute. It was serious error on the part of the labor arbiter to have assumed jurisdiction and adjudicated the
claim.
12. Encyclopaedia Brittanica v. NLRC
GR NO. 87098
November 4, 1996
It should be noted that in petitioner’s business of selling encyclopedias and books, the marketing of these
products was done through dealership agreements. The sales operations were primarily conducted by
independent authorized agents who did not receive regular compensations but only commissions based on the
sales of the products. These independent agents hired their own sales representatives, financed their own office
expenses, and maintained their own staff. Thus, there was a need for the petitioner to issue memoranda to
private respondent so that the latter would be apprised of the company policies and procedures. Nevertheless,
agents were free to conduct and promote their sales operations. The periodic reports to the petitioner by the
agents were but necessary to update the company of the latter’s performance and business income.
Control of employee’s conduct is commonly regarded as the most crucial and determinative indicator of the
presence or absence of an employer-employee relationship. Under this, an employer-employee relationship exists
where the person for whom the services are performed reserves the right to control not only the end to be
achieved, but also the manner and means to be used in reaching that end. The fact that petitioner issued
memoranda to private respondent and to other division sales managers did not prove that petitioner had actual
control over them. The different memoranda were merely guidelines on company policies which the sales
managers follow and impose on their respective agents.
"[T]he element of control is absent; where a person who works for another does so more or less at his own
pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the
result of his efforts and not the amount thereof, we should not find that the relationship of employer and employee
exists.”
13. HSY Marketing v. Villastique
GR NO. 219569
August 17, 2016
The Court had already exposed the practice of setting up "distributors" or "dealers" which are, in reality, dummy
companies that allow the mother company to avoid employer-employee relations and, consequently, shield the
latter from liability from employee claims in case of illegal dismissal, closure, unfair labor practices, and the like.
For failure to present evidence to rebut the allegation that the respondent is indeed an employee of the petitioner,
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it cannot be allowed to evade liability as the employer of respondent. The Court has already held that company
drivers who are under the control and supervision of management officers — like respondent herein — are regular
employees entitled to benefits including service incentive leave pay.
14. Coca-Cola Bottlers Phils., Inc. v. Climaco
GR NO. 146881
February 5, 2007
The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the
four-fold test: (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’s conduct, or the so-called "control test," considered to be
the most important element.
The Comprehensive Medical Plan which contains the respondent‘s objectives, duties and obligations, does not tell
respondent “how to conduct his physical examination, how to immunize, or how to diagnose and treat his patients,
employees of petitioner company, in each case.” It provided guidelines merely to ensure that the end result was
achieved, but did not control the means and methods by which respondent performed his assigned tasks.
15. Corporal v. NLRC
GR NO. 129315
October 2, 2000
An independent contractor is one who undertakes "job contracting", i.e., a person who (a) carries on an
independent business and undertakes the contract work on his own account under his own responsibility
according to his own manner and method, free from the control and direction of his employer or principal in all
matters connected with the performance of the work except as to the results thereof, and (b) has substantial
capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are
necessary in the conduct of the business.
In determining the employer-employee relationship using the control test, the power to control refers to the
existence of the power and not necessarily to the actual exercise thereof, nor is it essential for the employer to
actually supervise the performance of duties of the employee. It is enough that the employer has the right to wield
that power.
16. Maraguinot v. NLRC
GR NO. 120969
January 22, 1998
A work pool may exist although the workers in the pool do not receive salaries and are free to seek other
employment during temporary breaks in the business, provided that the worker shall be available when called to
report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied
to project workers insofar as the effect of temporary cessation of work is concerned. This is beneficial to both the
employer and employee for it prevents the unjust situation of "coddling labor at the expense of capital" and at the
same time enables the workers to attain the status of regular employees.
Once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the
same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable
to the usual business or trade of the employer, then the employee must be deemed a regular employee, pursuant
to Article 280 of the Labor Code and jurisprudence.
19. Calamba Medical Center v. NLRC
GR NO. 176484
November 25, 2008
Under the "control test," an employment relationship exists between a physician and a hospital if the hospital
controls both the means and the details of the process by which the physician is to accomplish his task. Where a
person who works for another does so more or less at his own pleasure and is not subject to definite hours or
conditions of work, and is compensated according to the result of his efforts and not the amount thereof, the
element of control is absent. For control test to apply, it is not essential for the employer to actually supervise the
performance of duties of the employee, it being enough that it has the right to wield the power.
Under Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, an employer-employee
relationship exists between the resident physicians and the training hospitals, unless there is a training agreement
between them, and the training program is duly accredited or approved by the appropriate government agency.
18. Jardin v. NLRC
GR NO. 119268
Labor Law 2 (Labor Relations) | Atty. Mercader
February 23, 2000
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In a number of cases decided by this Court, we ruled that the relationship between jeepney owners/operators on
one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of
lessor-lessee. In the lease of chattels, the lessor loses complete control over the chattel leased although the
lessee cannot be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In
the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the
latter. The management of the business is in the owner’s hands. The owner as holder of the certificate of public
convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules
promulgated as regards its operation.
The fact that the drivers do not receive fixed wages but get only that in excess of the so-called "boundary" they
pay to the owner/operator is not sufficient to withdraw the relationship between them from that of employer and
employee. The Court have applied by analogy the abovestated doctrine to the relationships between bus
owner/operator and bus conductor, auto-calesa owner/operator and driver, and recently between taxi
owners/operators and taxi drivers. Here, petitioner are considered employees of the private respondent as taxi
drivers perform activities which are usually necessary or desirable in the usual business or trade of their
employer.
19. Sonza v. ABSCBN
GR NO. 138051
June 10, 2004
The control test is the most important test our courts apply in distinguishing an employee from an independent
contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the
supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse
holds true as well – the less control the hirer exercises, the more likely the worker is considered an independent
contractor. Independent contractors often present themselves to possess unique skills, expertise or talent to
distinguish them from ordinary employees. The specific selection and hiring of SONZA, because of his unique
skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not
conclusive, of an independent contractual relationship.
Applying the control test to the present case, we find that SONZA is not an employee but an independent
contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the
supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse
holds true as well the less control the hirer exercises, the more likely the worker is considered an independent
contractor
The right of labor to security of tenure as guaranteed in the Constitution arises only if there is an
employer-employee relationship under labor laws. Not every performance of services for a fee creates an
employer-employee relationship. To hold that every person who renders services to another for a fee is an
employee - to give meaning to the security of tenure clause - will lead to absurd results. An individual like an artist
or talent has a right to render his services without any one controlling the means and methods by which he
performs his art or craft. This Court will not interpret the right of labor to security of tenure to compel artists and
talents to render their services only as employees. If radio and television program hosts can render their services
only as employees, the station owners and managers can dictate to the radio and television hosts what they say
in their shows. This is not conducive to freedom of the press.
20. Begino v. ABSCBN
GR NO. 199166
April 20, 2015
Notwithstanding the nomenclature of their Talent Contracts and/or Project Assignment Forms and the terms and
condition embodied therein, petitioners are regular employees of ABS-CBN because they perform functions
necessary and essential to ABS-CBN’s business. Respondents’ repeated hiring of petitioners for its long-running
news program positively indicates that the latter were ABS-CBN’s regular employees. Exclusivity Clause and
Prohibitions in talent contracts are indicative of control by the employer if it does not concern well-known
television and radio personality who can legitimately be considered as talent and compensated as such.
21. Orozco v. CA
GR NO. 155207
August 13, 2008
The newspaper’s power to approve or reject publication of any specific article she wrote for her column cannot be
the control contemplated in the "control test," as it is but logical that one who commissions another to do a piece
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of work should have the right to accept or reject the product. The important factor to consider in the "control test"
is still the element of control over how the work itself is done, not just the end result thereof. Where a person who
works for another performs his job more or less at his own pleasure, in the manner he sees fit, not subject to
definite hours or conditions of work, and is compensated according to the result of his efforts and not the amount
thereof, no employer-employee relationship exists.
22. TAPE, Inc. v. Servana
GR NO. 167648
January 28, 2008
Jurisprudence is abound with cases that recite the factors to be considered in determining the existence of
employer-employee relationship, namely: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the
means and method by which the work is to be accomplished.
Aside from possessing substantial capital or investment, a legitimate job contractor or subcontractor carries on a
distinct and independent business and undertakes to perform the job, work or service on its own account and
under its own responsibility according to its own manner and method, and free from the control and direction of
the principal in all matters connected with the performance of the work except as to the results thereof. TAPE
failed to establish that respondent is an independent contractor.
In classifying independent contractors, Policy Instruction No. 40 defines program employees as—
x x x those whose skills, talents or services are engaged by the station for a particular or specific program or
undertaking and who are not required to observe normal working hours such that on some days they work for less
than eight (8) hours and on other days beyond the normal work hours observed by station employees and are
allowed to enter into employment contracts with other persons, stations, advertising agencies or sponsoring
companies. The engagement of program employees, including those hired by advertising or sponsoring companies,
shall be under a written contract specifying, among other things, the nature of the work to be performed, rates of pay
and the programs in which they will work. The contract shall be duly registered by the station with the Broadcast
Media Council within three (3) days from its consummation.
23. Francisco v. NLRC
GR NO. 170087
August 31, 2006
When the control test is not sufficient to give a complete picture of the relationship between the parties, two-tiered
test must be applied. It involves: 1) the putative employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished; and (2) the underlying economic realities of the
activity or relationship. This two-tiered test would provide us with a framework of analysis, which would take into
consideration the totality of circumstances surrounding the true nature of the relationship between the parties.
This is especially appropriate in this case where there is no written agreement or terms of reference to base the
relationship on; and due to the complexity of the relationship based on the various positions and responsibilities
given to the worker over the period of the latter's employment.
The determination of the relationship between employer and employee depends upon the circumstances of the
whole economic activity, such as:
(1) the extent to which the services performed are an integral part of the employers business;
(2) the extent of the workers investment in equipment and facilities;
(3) the nature and degree of control exercised by the employer;
(4) the workers opportunity for profit and loss;
(5) the amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise;
(6) the permanency and duration of the relationship between the worker and the employer; and
(7) the degree of dependency of the worker upon the employer for his continued employment in that line
of business.
The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his
continued employment in that line of business.
24. WPP Marketing v. Galera
GR NO. 169207
Labor Law 2 (Labor Relations) | Atty. Mercader
March 25, 2010
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Corporate officers are given such character either by the Corporation Code or by the corporation’s by-laws. An
appointment as a corporate officer (Vice-President with the operational title of Managing Director of Mindshare)
during a special meeting of WPP’s Board of Directors is an appointment to a non-existent corporate office.
Therefore, respondent is an employee and the Labor Arbiter and the NLRC have jurisdiction over the present
case.
25. Matling Industrial v. Coros
GR NO. 157802
October 13, 2010
As a rule, the illegal dismissal of an officer or other employee of a private employer is properly cognizable by the
LA. This is pursuant to Article 217 (a) 2 of the Labor Code, as amended. Where the complaint for illegal dismissal
concerns a corporate officer, however, the controversy falls under the jurisdiction of the Securities and Exchange
Commission (SEC).
Thus, pursuant to the above provision (Section 25 of the Corporation Code), whoever are the corporate officers
enumerated in the by-laws are the exclusive Officers of the corporation and the Board has no power to create
other Offices without amending first the corporate By-laws. However, the Board may create appointive positions
other than the positions of corporate Officers, but the persons occupying such positions are not considered as
corporate officers within the meaning of Section 25 of the Corporation Code.
26. Malcaba v. Prohealth Pharma Philippines
GR NO. 209085
June 6, 2018
Under the Labor Code, the Labor Arbiter exercises original and exclusive jurisdiction over termination disputes
between an employer and an employee while the National Labor Relations Commission exercises exclusive
appellate jurisdiction over these cases. The presumption under this provision is that the parties have an
employer-employee relationship. Otherwise, the case would be cognizable in different tribunals even if the action
involves a termination dispute.
Under Section 25 of the Corporation Code, the President of a corporation is considered a corporate officer. The
dismissal of a corporate officer is considered an intra-corporate dispute, not a labor dispute. In ​Matling Industrial
v. Coros, ​the Court stated that jurisdiction over intra-corporate disputes involving the illegal dismissal of corporate
officers was with the Regional Trial Court, not with the Labor Arbiter. The mere designation as a high-ranking
employee, however, is not enough to consider one as a corporate officer. The clear weight of jurisprudence
clarifies that to be considered a corporate officer, first, the office must be created by the charter of the corporation,
and second, the officer must be elected by the board of directors or by the stockholders. Respondent
corporation's By-Laws creates the office of the President. That foundational document also states that the
President is elected by the Board of Directors. Finding that petitioner Malcaba is the President of respondent
corporation and a corporate officer, any issue on his alleged dismissal is beyond the jurisdiction of the Labor
Arbiter or the National Labor Relations Commission. Their adjudication on his money claims is void for lack of
jurisdiction.
27. Republic v. Asiapro Cooperative
GR NO. 172101
November 23, 2007
Re: Competence of the SSC to hear the case
The question on the existence of an employer-employee relationship is not within the exclusive jurisdiction of the
National Labor Relations Commission (NLRC). Article 217 of the Labor Code enumerating the jurisdiction of the
Labor Arbiters and the NLRC provides that:
ART. 217. JURISDICTION OF LABOR ARBITERS AND THE COMMISSION. - (a) x x x.
xxxx
6. Except claims for x x x Social Security, all other claims, arising from employer-employee relations, x x x”
Although the aforesaid provision speaks merely of claims for Social Security, it would necessarily include issues
on the coverage thereof, because claims are undeniably rooted in the coverage by the system. Hence, the
question on the existence of an employer-employee relationship for the purpose of determining the coverage of
the Social Security System is explicitly excluded from the jurisdiction of the NLRC and falls within the jurisdiction
of the SSC which is primarily charged with the duty of settling disputes arising under the Social Security Law of
1997.
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Re: existence of EE-ER relationship
It is true that the Service Contracts executed between the respondent cooperative and Stanfilco expressly provide
that there shall be no employer-employee relationship between the respondent cooperative and its
owners-members. This Court, however, cannot give the said provision force and effect. In determining the
existence of an employer-employee relationship, the four cardinal elements are considered, the most important
element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but
also as to the means and methods to accomplish.
In ruling in this case that there is an employer-employee relationship, the existence of an employer-employee
relationship cannot be negated by expressly repudiating it in a contract, when the terms and surrounding
circumstances show otherwise. The employment status of a person is defined and prescribed by law and not by
what the parties say it should be. Jurisprudence, furthermore, will show that it recognized that an owner-member
of a cooperative can be its own employee. A cooperative can be likened to a corporation with a personality
separate and distinct from its owners-members. Consequently, an owner-member of a cooperative can be an
employee of the latter and an employer-employee relationship can exist between them.
B. Reasonable Causal Connection Rule
28. San Miguel Corporation v. Ectuban
GR NO. 127639
December 3, 1999
The demarcation line between the jurisdiction of regular courts and labor courts over cases involving workers and
their employers has always been the subject of dispute. We have recognized that not all claims involving such
groups of litigants can be resolved solely by our labor courts. However, we have also admonished that the present
trend is to refer worker-employer controversies to labor courts, unless unmistakably provided by the law to be
otherwise. Because of this trend, jurisprudence has developed the "reasonable causal connection rule." Under
this rule, if there is a reasonable causal connection between the claim asserted and the employer-employee
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.
With regard to claims for damages under Art. 217(4) of the Labor Code, jurisprudence has evolved the rule that
claims for damages under paragraph 4 of Article 217, to be cognizable by the Labor Arbiter, 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 the claim for the damages be considered as arising from employer-employee relations.
The damages incurred by respondents as a result of the alleged fraudulent retrenchment program and the
allegedly defective “contract of termination” are merely the civil aspect of the injury brought about by their illegal
dismissal. The civil ramifications of their actual claim cannot alter the reality that it is primordially a labor matter
and, as such, is cognizable by labor courts.
29. Kawachi v. Del Quero
GR NO. 163768
March 27, 2007
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.
The Court cited the case of San Miguel Corporation v. Etcuban, developed the "reasonable causal connection
rule." Under this rule, if there is a reasonable causal connection between the claim asserted and the
employer-employee 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.
Where the employer-employee relationship is merely incidental and the cause of action proceeds from a different
source of obligation, the Court has not hesitated to uphold the jurisdiction of the regular courts. 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 the enforcement of a prior
employment contract, the jurisdiction of regular courts was upheld. The allegations in private respondent's
complaint unmistakably relate to the manner of her alleged illegal dismissal. In the instant case, the NLRC has
jurisdiction over private respondent's complaint for illegal dismissal and damages arising therefrom.
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30. Eviota v. CA
GR NO. 152121
July 29, 2003
Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive
jurisdiction of the labor arbiter. A money claim by a worker against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter only if there is a “reasonable causal connection” between the claim
asserted and employee-employer relation. Absent such a link, the complaint will be cognizable by the regular
courts of justice. Actions between employees and employer where the employer-employee relationship is merely
incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction
of the regular court. The jurisdiction of the Labor Arbiter under Article 217 of the Labor Code, as amended, is
limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the
Labor Code of the Philippines, other labor laws or their collective bargaining agreements. The fact that the private
respondent was the erstwhile employer of the petitioner under an existing employment contract before the latter
abandoned his employment is merely incidental. In fact, the petitioner had already been replaced by the private
respondent before the action was filed against the petitioner.
In this case, jurisdiction over the controversy belongs to the civil courts. The action was for breach of a contractual
obligation, intrinsically a civil dispute; while seemingly the cause of action arose from employer-employee
relations, the employers claim for damages is grounded on wanton failure and refusal without just cause to report
to duty coupled with the averment that the employee maliciously and with bad faith violated the terms and
conditions of the contract to the damage of the employer. Such averments removed the controversy from the
coverage of the Labor Code of the Philippines and brought it within the purview of the Civil Law.
31. Indophil Textile Mills v. Adviento GR NO. 171212
August 4, 2014
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. Such distinction is apt since it cannot be
presumed that money claims of workers which do not arise out of or in connection with their employer-employee
relationship, and which would therefore fall within the general jurisdiction of the regular courts of justice, were
intended by the legislative authority to be taken away from the jurisdiction of the courts and lodged with Labor
Arbiters on an exclusive basis.
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.
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 respondent’s claim for damages is specifically
grounded on petitioner’s gross negligence to provide a safe, healthy and workable environment for its employees
−a case of quasi-delict. A perusal of the complaint would reveal that the subject matter is one of claim for
damages arising from quasi-delict, which is within the ambit of the regular court's jurisdiction.
C. Mandatory Conciliation and Mediation as Prerequisite for the Exercise of Jurisdiction
D. Labor Arbiter
1. Labor dispute, defined
32. San Miguel Corporation Employees Union v. Bersamira
GR NO. 87700
June 13, 1990
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "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 the disputants
stand in the proximate relation of employer and employee." A labor dispute can nevertheless exist "regardless of
whether the disputants stand in the proximate relationship of employer and employee" (Article 212 [1], Labor
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Code, ​supra)​ provided the controversy concerns, among others, the terms and conditions of employment or a
"change" or "arrangement" thereof (​ibid​). The existence of a labor dispute is not negative by the fact that the
plaintiffs and defendants do not stand in the proximate relation of employer and employee, provided the
controversy concerns, among others, terms and conditions of employment, or a change or arrangement thereof.
As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals. The claim of
SanMig that the action below is for damages under Articles 19, 20 and 21 of the Civil Code would not suffice to
keep the case within the jurisdictional boundaries of regular Courts. That claim for damages is interwoven with a
labor dispute existing between the parties and would have to be ventilated before the administrative machinery
established for the expeditious settlement of those disputes.
33. Citibank, N. A. v. CA
GR NO. 108961
November 27, 1998
Article 212, paragraph l of the Labor Code provides the definition of a "labor dispute". It "includes any controversy
or matter concerning terms or 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 the disputants stand in the proximate relation of employer and employee."
If at all, the dispute between Citibank and El Toro security agency is one regarding the termination or non-renewal
of the contract of services. This is a civil dispute. El Toro was an independent contractor. Thus, no
employer-employee relationship existed between Citibank and the security guard members of the union in the
security agency who were assigned to secure the bank's premises and property. Hence, there was no labor
dispute and no right to strike against the bank. In this case, it was the security agency El Toro that recruited, hired
and assigned the watchmen to their place of work. It was the security agency that was answerable to Citibank for
the conduct of its guards.
34. PAL v. NLRC
GR NO. 120567
Article 218 of the Labor Code empowers the NLRC-
March 20, 1998
"(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."
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, x x x”
The foregoing ancillary power may be exercised by the Labor Arbiters only as an incident to the cases pending
before them in order to preserve the rights of the parties during the pendency of the case, but excluding labor
disputes involving strikes or lockout. 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." Taking into account the foregoing definitions, it is an essential requirement that there must first be a labor
dispute between the contending parties before the labor arbiter.
2. Original and exclusive jurisdiction
35. Pondoc v. NLRC
GR NO. 116347
October 3, 1996
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, while Rule XI of the New Rules of Procedure of the NLRC makes injunction only an ancillary
remedy in ordinary labor disputes. The foregoing ancillary power may be exercised by the Labor Arbiters only as
an incident to the cases pending before them in order to preserve the rights of the parties during the pendency of
the case, but excluding labor disputes involving strike or lockout. Under paragraph (b), Art. 217 of the Labor Code,
the NLRC has exclusive appellate jurisdiction over all cases decided by the Labor Arbiters. This simply means
that the NLRC does not have original jurisdiction over the cases enumerated in paragraph (a) and that if a claim
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does not fall within the exclusive original jurisdiction of the Labor Arbiter, the NLRC cannot have appellate
jurisdiction thereon.
The conclusion is inevitable that the NLRC was without jurisdiction, either original or appellate, to receive
evidence on the alleged indebtedness, render judgment thereon, and direct that its award be set-off against the
final judgment of the Labor Arbiter. As correctly pointed out by the Solicitor General, there is a complete want of
evidence that the indebtedness asserted by the private respondent against Andres Pondoc arose out of or was
incurred in connection with the employer-employee relationship between them. The Labor Arbiter did not then
have jurisdiction over the claim as under paragraph (a) of Article 217 of the Labor Code
36. Villamaria v. CA and Bustamante
GR NO. 165881
April 19, 2006
Under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical relationship was created
between petitioner and respondent: that of employer-employee and vendor-vendee. The Kasunduan did not
extinguish the employer-employee relationship of the parties extant before the execution of said deed.
In the cases provided in Article 217 of the Labor Code, an employer-employee relationship is an indispensable
jurisdictional requisite. The jurisdiction of Labor Arbiters and the NLRC under Article 217 of the Labor Code is
limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the
Labor Code, other labor statutes or their collective bargaining agreement. Not every dispute between an employer
and employee involves matters that only the Labor Arbiter and the NLRC can resolve in the exercise of their
adjudicatory or quasi-judicial powers. Actions between employers and employees where the employer-employee
relationship is merely incidental is within the exclusive original jurisdiction of the regular courts. When the principal
relief is to be granted under labor legislation or a collective bargaining agreement, the case falls within the
exclusive jurisdiction of the Labor Arbiter and the NLRC even though a claim for damages might be asserted as
an incident to such claim.
37. San Jose v. NLRC
GR NO. 121227
August 17, 1998
An analysis of the provisions of Articles 217, 261, and 262 indicates that:
1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of Voluntary Arbitrators over the
cases enumerated in Articles 217, 261 and 262, can possibly include money claims in one form or
another.
2. The cases where the Labor Arbiters have original and exclusive jurisdiction are enumerated in Article 217,
and that of the Voluntary Arbitrator or Panel of Voluntary Arbitrators in Article 261.
3. The original and exclusive jurisdiction of Labor Arbiters is qualified by an exception as indicated in the
introductory sentence of Article 217 (a), to wit:
Art. 217. Jurisdiction of Labor Arbiters ... (a) Except as otherwise provided under this Code x x x
The phrase “Except as otherwise provided under this Code” refers to the following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters …
xxx
(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.
4. The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is provided for in Arts. 261 and
262 of the Labor Code as indicated above.
The original and exclusive jurisdiction of the Labor Arbiter under Article 217(c) for money claims is limited only to
those arising from statutes or contracts other than a Collective Bargaining Agreement. The Voluntary Arbitrator or
Panel of Voluntary Arbitrators will have original and exclusive jurisdiction over money claims “arising from the
interpretation or implementation of the Collective Bargaining Agreement and, those arising from the interpretation
or enforcement of company personnel policies,” under Article 261. The voluntary arbitrator or panel of voluntary
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arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor
practices and bargaining deadlocks.” It must be emphasized that the jurisdiction of the Voluntary Arbitrator or
Panel of Voluntary Arbitrators under Article 262 must be voluntarily conferred upon by both labor and
management. The labor disputes referred to in the same Article 262 can include those mentioned in Article 217
over which the Labor Arbiter has original and exclusive jurisdiction.
38. Del Monte v. Saldivar
GR NO. 158620
October 11, 2006
Article 217(c) states: 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. In contrast, Article 261 of the Labor Code indubitably vests on the Voluntary Arbitrator or
panel of Voluntary Arbitrators the "original and exclusive jurisdiction to hear and decide all unresolved grievances
arising from the interpretation or implementation of the Collective Bargaining Agreement." Among those areas of
conflict traditionally within the jurisdiction of Voluntary Arbitrators are contract-interpretation and
contract-implementation.
In reconciling the grants of jurisdiction vested under Articles 261 and 217 of the Labor Code, the Court has
pronounced that "the original and exclusive jurisdiction of the Labor Arbiter under Article 217(c) for money claims
is limited only to those arising from statutes or contracts other than a Collective Bargaining Agreement. The
Voluntary Arbitrator or Panel of Voluntary Arbitrators will have original and exclusive jurisdiction over money
claims 'arising from the interpretation or implementation of the Collective Bargaining Agreement and, those arising
from the interpretation or enforcement of company personnel policies', under Article 261."
Thus, as the law indubitably precludes the Labor Arbiter from enforcing money claims arising from the
implementation of the CBA, the CBA herein complementarily recognizes that it is the Voluntary Arbitrators which
have jurisdiction to hear the claim. The Labor Arbiter correctly refused to exercise jurisdiction over Del Monte's
cross-claim, and the Court of Appeals would have no basis had it acted differently.
39. 7K Corporation v. Albarico
GR NO. 182295
June 26, 2013
Although the general rule under the Labor Code gives the labor arbiter exclusive and original jurisdiction over
termination disputes as provided for in Art. 217, it also recognizes exceptions. One of the exceptions is provided
in Article 262 of the Labor Code. In San Jose v. NLRC, the Court said:
The phrase “Except as otherwise provided under this Code” refers to the following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters . . .
xxxx
(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, s​ hall also hear and decide all other labor disputes including unfair labor practices and bargaining
deadlocks.
The labor disputes referred to in the same Article 262 [of the Labor Code] can include all those disputes
mentioned in Article 217 over which the Labor Arbiter has original and exclusive jurisdiction.” From the above
discussion, it is clear that voluntary arbitrators may, by agreement of the parties, assume jurisdiction over a
termination dispute such as the present case, contrary to the assertion of petitioner that they may not.
In ruling that VA assumed jurisdiction in deciding the issue of the legality of dismissal of Albarico, the
circumstances of the case lead to no other conclusion that the claim for separation pay was premised on his
allegation of illegal dismissal. Then, VA properly assumed jurisdiction over the issue of the legality of his
dismissal. To think otherwise would lead to absurdity, because the voluntary arbitrator would then be deciding that
issue in a vacuum. The arbitrator would have no basis whatsoever for saying that respondent was entitled to
separation pay or not if the issue of the legality of Albarico’s dismissal was not resolved first.
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b. Unfair Labor Practice
40. Allan Mendoza v. Manila Water Employees Union
GR NO. 201595
January 25, 2016
While it is true that some of petitioner’s causes of action constitute intra-union cases cognizable by the BLR under
Article 226 of the Labor Code, petitioner’s charge of unfair labor practices falls within the original and exclusive
jurisdiction of the Labor Arbiters, pursuant to Article 217 of the Labor Code. Where the facts show that respondent
is guilty of unfair labor practices under Article 249 (a) and (b) – that is, violation of petitioner’s right to
self-organization, unlawful discrimination, and illegal termination of his union membership – which case falls within
the original and exclusive jurisdiction of the Labor Arbiters, in accordance with Article 217 of the Labor Code.
c. Termination Dispute
41. Atlas Farms v. NLRC
GR NO. 142244
November 18, 2002
Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the
grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where there was already actual
termination, with alleged violation of the employees’ rights, it is already cognizable by the labor arbiter.
Only disputes involving the union and the company shall be referred to the grievance machinery or voluntary
arbitrators. In these termination cases of private respondents, the union had no participation, it having failed to
object to the dismissal of the employees concerned by the petitioner. It is obvious that arbitration without the
union’s active participation on behalf of the dismissed employees would be pointless, or even prejudicial to their
cause. Given the fact of dismissal, it can be said that the cases were effectively removed from the jurisdiction of
the voluntary arbitrator, thus placing them within the jurisdiction of the labor arbiter.
42. Negros Metal v. Lamayo
GR NO. 186557
August 25, 2010
Under Art. 217, it is clear that a labor arbiter has original and exclusive jurisdiction over termination disputes. On
the other hand, under Article 261, a voluntary arbitrator has original and exclusive jurisdiction over grievances
arising from the interpretation or enforcement of company policies. As a general rule then, termination disputes
should be brought before a labor arbiter, except when the parties, under Art. 262, unmistakably express that they
agree to submit the same to voluntary arbitration. Where the CBA provision on grievance machinery does not
expressly state that termination disputes are included in the ambit of what may be brought before the company’s
grievance machinery, the original and exclusive jurisdiction of the Labor Arbiter over termination disputes is not
removed.
43. Vivero v. CA
GR NO. 138938
October 24, 2000
Where the question to be resolved necessarily springs from the primary issue of whether there was a valid
termination, and proper interpretation and implementation of the CBA provisions comes into play only because the
grievance procedure provided for in the CBA was not observed after he sought his Union’s assistance in
contesting his termination, there would be no reason to invoke the need to interpret and implement the CBA
provisions properly. The instant case then is a termination dispute falling under the original and exclusive
jurisdiction of the Labor Arbiter
A quick perusal of the pertinent provision of the CBA show:
“x x x The Master shall refer the case/dispute upon reaching port and if not satisfactorily settled, the case/dispute ​may be referred to
the grievance machinery or procedure hereinafter provided.”
The use of the word “may” in the provision shows that the import of the CBA and the intention of the parties was
to reserve the right to submit the illegal termination dispute to the jurisdiction of the Labor Arbiter rather than a
Voluntary Arbitrator.
44. University of Immaculate Conception v. NLRC
GR NO. 181146
January 26, 2011
Article 217 of the Labor Code states that unfair labor practices and termination disputes fall within the original and
exclusive jurisdiction of the Labor Arbiter. The exception lies in:
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.
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Hence, when gleaned from the transcript of stenographic notes of the administrative hearing shows that the
parties clearly agreed to resort to voluntary arbitration, the Labor Arbiter should have immediately disposed of the
complaint and referred the same to the voluntary arbitrator.
45. Austria v. NLRC
GR NO. 124382
August 16, 1992
Re: Coverage of religious corporations under the Labor Code
Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to
include religious corporations in its coverage. Article 278 of the Labor Code on post-employment states that "the
provisions of this Title shall apply to all establishments or undertakings, whether for profit or not." Obviously, the
cited article does not make any exception in favor of a religious corporation. This is made more evident by the fact
that the Rules Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the Termination of
Employment and Retirement, categorically includes religious institutions in the coverage of the law.
46. Reyes v. RTC Makati, Zenith Insurance Corporation
GR NO. 165744
August 11, 2008
To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the
branches of the RTC specifically designated by the Court to try and decide such cases, two elements must
concur: (a) the status or relationship of the parties; and (2) the nature of the question that is the subject of their
controversy.
The first element requires that the controversy must arise out of intra-corporate or partnership relations between
any or all of the parties and the corporation, partnership, or association of which they are stockholders, members
or associates; between any or all of them and the corporation, partnership, or association of which they are
stockholders, members, or associates, respectively; and between such corporation, partnership, or association
and the State insofar as it concerns their individual franchises.
The second element requires that the dispute among the parties be intrinsically connected with the regulation of
the corporation. If the nature of the controversy involves matters that are purely civil in character, necessarily, the
case does not involve an intra-corporate controversy.
47. Locsin v. Nissan Lease Philippines
GR NO. 185567
October 20, 2010
Re: officer v. employee
An "office" is created by the charter of the corporation and the officer is elected by the directors or stockholders.
On the other hand, an "employee" usually occupies no office and generally is employed not by 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.
Re: jurisdiction over issues on corporate officer’s dismissal
A corporate officer’s dismissal is always a corporate act, or an intra-corporate controversy which arises between a
stockholder and a corporation. Prior to its amendment, Section 5(c) of Presidential Decree No. 902-A (PD 902-A)
provided that intra-corporate disputes fall within the jurisdiction of the Securities and Exchange Commission
(SEC):
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations,
partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have
original and exclusive jurisdiction to hear and decide cases involving:
xxxx
c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or
associations.
Subsection 5.2, Section 5 of Republic Act No. 8799, which took effect on 8 August 2000, transferred to regional
trial courts the SEC’s jurisdiction over all cases listed in Section 5 of PD 902-A.
48. Wesleyan University v. Maglaya
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"Corporate officers" in the context of Presidential Decree No. 902-A are those officers of the corporation who are
given that character by the Corporation Code or by the corporation's by-laws. There are three specific officers
whom a corporation must have under Section 25 of the Corporation Code. These are the president, secretary and
the treasurer. The number of officers is not limited to these three. A corporation may have such other officers as
may be provided for by its by-laws like, but not limited to, the vice-president, cashier, auditor or general manager.
The number of corporate officers is thus limited by law and by the corporation's by-laws.
The creation of the position is under the corporation's charter or by-laws, and that the election of the officer is by
the directors or stockholders must concur in order for an individual to be considered a corporate officer, as against
an ordinary employee or officer. It is only when the officer claiming to have been illegally dismissed is classified as
such corporate officer that the issue is deemed an intra-corporate dispute which falls within the jurisdiction of the
trial courts.
49. Cacho v. Balagtas
GR NO. 202974
February 17, 2018
Two-tier test must be employed to determine whether an intra-corporate controversy exists in the present case,
viz.: (a) the relationship test, and (b) the nature of the controversy test.
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.
Under the nature of the controversy test, the disagreement must not only be rooted in the existence of an
intra-corporate relationship, but must as well pertain to the enforcement of the parties' correlative rights and
obligations under the Corporation Code and the internal and intra-corporate regulatory rules of the corporation.
All told, the issue in the present case is an intra-corporate controversy, a matter outside the Labor Arbiter's
jurisdiction.
D. Monetary Claims
50. Paredes v. Feed the Children Philippines
GR NO. 184397
September 9, 2015
The money claims within the original and exclusive jurisdiction of labor arbiters are those which have some
reasonable causal connection with the employer-employee relationship. By the designating clause "arising from
the employer-employee relations," Article 217 applies 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.
This claim is distinguished 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 regular courts
have jurisdiction 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 the
enforcement of a prior employment contract. The fact that the transaction happened at the time they were
employer and employee did not negate the civil jurisdiction of trial court. Hence, it is erroneous for the LA and the
CA to rule on such claim arising from a different source of obligation and where the employer-employee
relationship was merely incidental, moreso when the claim does not arise from or is necessarily connected with
the fact of termination.
51. Lunzaga v. Albar Shipping
GR NO. 200476
April 18, 2012
A review of the records of the case reveals that the main issue in the complaint before the Labor Arbiter was
whether the heirs of Romeo are entitled to receive his death benefits from Albar. Clearly, the Labor Arbiter has
jurisdiction over this issue and the case itself, involving as it does a claim arising from an employer-employee
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relationship. And while the Labor Arbiter has no jurisdiction to determine who among the alleged heirs is entitled
to receive Romeo's death benefits, it should have made a ruling holding Albar liable for the claim.
52. Santos v. Servier Philippines
GR NO. 166377
November 28, 2008
Re: claim for illegal deduction due to alleged tax deductions on retirement benefits
It is noteworthy that petitioner demanded the completion of her retirement benefits, including the amount withheld
by respondent for taxation purposes. The issue of deduction for tax purposes is intertwined with the main issue of
whether or not petitioner's benefits have been fully given her. It is, therefore, a money claim arising from the
employer-employee relationship, which clearly falls within the jurisdiction of the Labor Arbiter and the NLRC.
53. World’s Best Gas v. Vital
GR NO. 211588
September 9, 2015
Having no subject matter jurisdiction to resolve claims arising from employer-employee relations, the RTC's ruling
on unpaid salaries and separation pay is, thus, null and void, and therefore, cannot perpetuate even if affirmed on
appeal. However, since the dismissal is grounded on lack of jurisdiction, then the same should be considered as a
dismissal without prejudice. Hence, claimant may re-file the same claim, including those related thereto (e.g.,
moral and exemplary damages, and attorney's fees) before the proper labor tribunal.
54. Halaguena v. PAL
GR NO. 172013
October 2, 2009
Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive
jurisdiction of the labor arbiter. Actions between employees and employer where the employer-employee
relationship is merely incidental and the cause of action precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court. The jurisdiction of labor arbiters and the NLRC under Article 217 of the
Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by
reference to the Labor Code, other labor statutes, or their collective bargaining agreement.
In this case, The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the
application of the Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms
of Discrimination Against Women and the power to apply and interpret the constitution and CEDAW is within the
jurisdiction of trial courts, a court of general jurisdiction.
55. Pepsi Cola v. Gal-lang
GR NO. 89621
September 24, 1991
A complaint for damages for malicious prosecution filed by employees has its jurisdiction belonging with the
regular courts.
The complaint did not arise from such relations and in fact could have arisen independently of an employment
relationship between the parties. No such relationship or any unfair labor practice is asserted. What the
employees are alleging is that the petitioners acted with bad faith when they filed the criminal complaint which the
Municipal Trial Court said was intended "to harass the poor employees" and the dismissal of which was affirmed
by the Provincial Prosecutor "for lack of evidence to establish even a slightest probability that all the respondents
herein have committed the crime imputed against them." This is a matter which the labor arbiter has no
competence to resolve as the applicable law is not the Labor Code but the Revised Penal Code.
56. Banez v. Valdevilla
GR NO. 128024
May 9, 2000
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".
The Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed
by the Civil Code.
By the designating clause "arising from the employer-employee relations", 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
counterclaim in the illegal dismissal case. 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.
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57. Milan v. NLRC
GR NO. 202961
February 4, 2015
Claims arising from an employer-employee relationship are not limited to claims by an employee. Employers may
also have claims against the employee, which arise from the same relationship. 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
counterclaim in the illegal dismissal case. As a general rule, therefore, a claim only needs to be sufficiently
connected to the labor issue raised and must arise from an employer-employee relationship for the labor tribunals
to have jurisdiction.
Respondent Solid Mills allowed the use of its property for the benefit of petitioners as its employees. Petitioners
were merely allowed to possess and use it out of respondent Solid Mills’ liberality. The employer may, therefore,
demand the property at will. Thus, the return of the property’s possession became an obligation or liability on the
part of the employees when the employer-employee relationship ceased.
58. Amecos Innovations v. Lopez
GR NO. 178055
July 2, 2014
Article 217(a)(4) of the Labor Code is applicable, between petitioner and respondent.. 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.”
59. PAL v. Airline Philots Association of the Philippines
GR NO. 200088
February
26,
2018
To determine whether a claim for damages under paragraph 4 of Article 217 is properly cognizable by the labor
arbiter, jurisprudence has evolved the "reasonable connection rule" which essentially states that the claim for
damages must have reasonable causal connection with any of the claims provided for in that article. A money
claim by a worker against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter only if
there is a "reasonable causal connection" between the claim asserted and employee-employer relations. Only if
there is such a connection with the other claims can the claim for damages be considered as arising from
employer-employee relations.
The SOLE assumed jurisdiction over the labor dispute between PAL and the respondents on 23 December 1997.
In this regard, it is settled that the authority of the SOLE to assume jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the national interest includes and extends to all
questions and controversies arising therefrom. When the SOLE assumed jurisdiction over the labor dispute, the
claim for damages was deemed included therein.
E. Legality of strikes and lockouts
F. Legislated wage increases and wage distortion
G. In relation to DOLE jurisdiction under Arts. 128 and 129
60. Ex-Bataan Veterans Security Agency v. Secretary of Labor
GR NO. 152396
November 20,
2007
While it is true that under Articles 129 and 217 of the Labor Code, the Labor Arbiter has jurisdiction to hear and
decide cases where the aggregate money claims of each employee exceeds P5,000.00, said provisions of law do
not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized
representatives. Rather, said powers are defined and set forth in Article 128 of the Labor Code. However, if the
labor standards case is covered by the exception clause in Article 128(b) of the Labor Code, then the Regional
Director will have to endorse the case to the appropriate Arbitration Branch of the NLRC.
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In order to divest the Regional Director or his representatives of jurisdiction, the following elements must be
present:
1) that the employer contests the findings of the labor regulations officer and raises issues thereon;
2) that in order to resolve such issues, there is a need to examine evidentiary matters; and
3) that such matters are not verifiable in the normal course of inspection.
If the case does not fall under the exception clause, the Regional Director may validly assume jurisdiction over
money claims because such jurisdiction was exercised in accordance with Article 128(b) of the Labor Code even
if the claims exceeded P5,000.
61. People’s Broadcasting (Bombo Radyo Phils., Inc.) v. SOLE
GR NO. 179652
March
6, 2012
Under Art. 128(b) of the Labor Code, as amended by RA 7730, it is clear and beyond debate that an
employer-employee relationship must exist for the exercise of the visitorial and enforcement power of the DOLE.
The determination of the existence of an employer-employee relationship by the DOLE must be respected. 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 expanded visitorial and enforcement
power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple
expedient of disputing the employer-employee relationship, force the referral of the matter to the NLRC.
62. Meteoro v. Creative Creatures
GR NO. 171275
July 13, 2009
The visitorial and enforcement powers of the Secretary, exercised through his representatives, encompass
compliance with all labor standards laws and other labor legislation, regardless of the amount of the claims filed
by workers. This notwithstanding, the power of the Regional Director to hear and decide the monetary claims of
employees is not absolute. The last sentence of Article 128 (b) of the Labor Code, otherwise known as the
"exception clause," provides an instance when the Regional Director or his representatives may be divested of
jurisdiction over a labor standards case. Under prevailing jurisprudence, the so-called "exception clause" has the
following elements, all of which must concur:
1) that the employer contests the findings of the labor regulations officer and raises issues thereon;
2) that in order to resolve such issues, there is a need to examine evidentiary matters; and
3) that such matters are not verifiable in the normal course of inspection.
In such case, the Regional Director shall refer the matter to the Labor Arbiter.
H. Enforcement or annulment of compromise agreement (Art. 233)
I. Execution and enforcement of voluntary arbitrator’s decision (Art. 276)
63. Santiago v. CF Sharp Crew Management
GR NO. 162419
Section 10 of R.A. No. 8042 (Migrant Workers Act), provides that:
July 10, 2007
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 b​y virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages.
The jurisdiction of labor arbiters is not limited to claims arising from employer-employee relationships. Despite the absence of
an employer-employee relationship between petitioner and respondent, the Court rules that the NLRC has jurisdiction over
petitioner’s complaint.
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64. IPAMS v. De Vera
GR NO. 205703
March 7, 2016
For a foreign law to govern an employment contract the following requisites must be met:
1) That it is expressly stipulated in the overseas employment contract that a specific foreign law shall govern;
2) That the foreign law invoked must be proven before the courts pursuant to the Philippine rules on evidence;
3) That the foreign law stipulated in the overseas employment contract must not be contrary to law, morals, good
customs, public order, or public policy of the Philippines; and
4) That the overseas employment contract must be processed through the POEA.
Absence thereof, the foreign law will not be applicable as it will be against our fundamental and statutory laws.
65. Ace Navigation v. Fernandez
GR NO. 197309
October 10, 2012
The State’s labor relations policy laid down in the Constitution and fleshed out in the enabling statute, the Labor Code (Art.
260, 261 and 262) and the POEA-SEC provide that the voluntary arbitrator or panel of voluntary arbitrators has original and
exclusive jurisdiction over Fernandez’s disability claim. Where there is unequivocal or unmistakable language in the agreement
which mandatorily requires the parties to submit to the grievance procedure any dispute or cause of action they may have
against each other, it unmistakably reflects the parties’ agreement to submit any unresolved dispute at the grievance resolution
stage to mandatory voluntary arbitration. It is settled that when the parties have validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary arbitration then that procedure should be strictly observed.
POEA-SEC, which governs the employment of Filipino seafarers, provides in its Sec. 29 on Dispute Settlement Procedures,
provides:
In cases of claims and disputes arising from this employment, the parties covered by a collective bargaining agreement ​shall submit
the claim or dispute to the original and exclusive jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators. If the parties
are not covered by a collective bargaining agreement, the parties may at their option submit the claim or dispute to either the original
and exclusive jurisdiction of the National Labor Relations Commission (NLRC), pursuant to Republic Act (RA) 8042 otherwise known
as the Migrant Workers and Overseas Filipinos Act of 1995 or to the original and exclusive jurisdiction of the voluntary arbitrator or
panel of voluntary arbitrators. If there is no provision as to the voluntary arbitrators to be appointed by the parties, the same shall be
appointed from the accredited voluntary arbitrators of the National Conciliation and Mediation Board of the Department of Labor and
Employment.
66. Heirs Dulay v. Aboitiz
A careful reading of this RA 8042 would readily show that there is no specific provision thereunder which provides
for jurisdiction over disputes or unresolved grievances regarding the interpretation or implementation of a CBA.
Section 10 of R.A. 8042, which is cited by petitioner, simply speaks, in general, of "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."
With respect to disputes involving claims of Filipino seafarers wherein the parties are covered by a collective
bargaining agreement, the dispute or claim should be submitted to the jurisdiction of a voluntary arbitrator or panel
of arbitrators. It is only in the absence of a collective bargaining agreement that parties may opt to submit the
dispute to either the NLRC or to voluntary arbitration.
K. In relation to GOCCs
67. LRTA v. Alvarez
GR NO. 188047
November 28, 2016
In LRTA v. Mendoza, which have the same facts, issue, and claims as in this case, the Court upheld the
jurisdiction of the labor tribunals over LRTA, citing PNB v. Pabalan, stating that: “By engaging in a particular
business thru the instrumentality of a corporation, the government divests itself pro hac vice of its sovereign
character, so as to render the corporation subject to the rules of law governing private corporations.” LRTA must
submit itself to the provisions governing private corporations, including the Labor Code, for having conducted
business through a private corporation. Therefore, the jurisdiction of the Labor Arbiter shall be upheld.
68. GSIS v. NLRC
GR NO. 180045
November 17, 2010
The declared policy of the State in Section 39 of the GSIS Charter granting GSIS an exemption from tax, lien,
attachment, levy, execution, and other legal processes should be read together with the grant of power to the
GSIS to invest its "excess funds" under Section 36 of the same Act. Under Section 36, the GSIS is granted the
ancillary power to invest in business and other ventures for the benefit of the employees, by using its excess
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funds for investment purposes. In the exercise of such function and power, the GSIS is allowed to assume a
character similar to a private corporation. Thus, it may sue and be sued, as also, explicitly granted by its charter.
69. Duty Free Philippines v. Mojica
GR NO. 166365
September 30, 2005
Civil Service Authorities has jurisdiction in controversies involving the terms of employment, and other related
issues, of the Civil Service official and employees. Civil Service Commission shall hear and decide administrative
cases instituted by or brought before it directly or on appeal, including contested appointments, and review
decisions and actions of its offices and of the agencies attached to it.
DFP was created under Executive Order (EO) No. 46 primarily to augment the service facilities for tourists and to
generate foreign exchange and revenue for the government. DFP is under the exclusive authority of the PTA, a
corporate body attached to the Department of Tourism, it follows that its officials and employees are likewise
subject to the Civil Service rules and regulations.
L. Cases with foreign element
70. WPP Marketing v. Galera
GR NO. 169207
March 25, 2010
The law and the rules are consistent in stating that the employment permit must be acquired prior to employment.
The Labor Code states: "Any alien seeking admission to the Philippines for employment purposes and any
domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor." Section 4, Rule XIV, Book 1 of the Implementing Rules and
Regulations provides:
Employment permit required for entry. — No alien seeking employment, whether as a resident or non-resident, may enter the
Philippines without first securing an employment permit from the Ministry. If an alien enters the country under a non-working visa
and wishes to be employed thereafter, he may only be allowed to be employed upon presentation of a duly approved employment
permit.
When there is violation of the said provision, the alien employee cannot come to this Court with unclean hands.
To grant such is to sanction the violation of the Philippine labor laws requiring aliens to secure work permits
before their employment.
71. Pakistan International Airlines v. Ople
GR NO. 61594
September 28, 1990
Art. 278 of the Labor Code, as it then existed, forbade the termination of the services of employees with at least
one (1) year of service without prior clearance from the Department of Labor and Employment:
Art. 278. Miscellaneous Provisions — . . .
(b) With or without a collective agreement, no employer may shut down his establishment or dismiss or
terminate the employment of employees with at least one year of service during the last two (2) years,
whether such service is continuous or broken, without prior written authority issued in accordance with
such rules and regulations as the Secretary may promulgate . . . (emphasis supplied)
Rule XIV, Book No. 5 of the Rules and Regulations Implementing the Labor Code, made clear that in case of a
termination without the necessary clearance, ​the Regional Director was authorized to order the reinstatement of
the employee concerned and the payment of backwages; necessarily, therefore, the Regional Director must have
been given jurisdiction over such termination cases.
72. PNB v. Cabansag
GR NO. 157010
June 21, 2005
Based on Article 217 of the Labor Code and Section 10 of RA 8042, labor arbiters clearly have original and
exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes
involving all workers, among whom are overseas Filipino workers (OFW). Securing an employment pass in the
foreign country to work does not automatically mean that the non-citizen is thereby bound by local laws only, as
averred by petitioner. It does not at all imply a waiver of one's national laws on labor. Absent any clear and
convincing evidence to the contrary, such permit simply means that its holder has a legal status as a worker in the
issuing country.
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As held by the Court in Royal Crown Internationale v. NLRC, "whether employed locally or overseas, all Filipino
workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary
notwithstanding. This pronouncement is in keeping with the basic public policy of the State to afford protection to
labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate
the relations between workers and employers.”
73. Manila Hotel v. NLRC
GR NO. 120077
October 13, 2000
Under the rule of ​forum non conveniens,​ a Philippine court or agency may assume jurisdiction over the case if it
chooses to do so provided:
1) that the Philippine court is one to which the parties may conveniently resort to;
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.
When the Court held that the requisites to warrant application of forum non-conveniene is present, this is not to
say that Philippine courts and agencies have no power to solve controversies involving foreign employers. Neither
are we saying that we do not have power over an employment contract executed in a foreign country. If the
worker were an "overseas contract worker", a Philippine forum, specifically the POEA, not the NLRC, would
protect him.
74. Saudi Arabian Airlines v. Rebesencio
GR NO. 198587
January 14, 2015
Contractual choice of law is not determinative of jurisdiction. Stipulating on the laws of a given jurisdiction as the
governing law of a contract does not preclude the exercise of jurisdiction by tribunals elsewhere. The reverse is
equally true: The assumption of jurisdiction by tribunals does not ipso facto mean that it cannot apply and rule on
the basis of the parties' stipulation.
Under the doctrine of forum non conveniens, "a court, in conflicts of law cases, may refuse impositions on its
jurisdiction where it is not the most 'convenient' or available forum and the parties are not precluded from seeking
remedies elsewhere." Consistent with the principle of comity, a tribunal's desistance in exercising jurisdiction on
account of forum non conveniens is a deferential gesture to the tribunals of another sovereign. It is a measure that
prevents the former's having to interfere in affairs which are better and more competently addressed by the latter.
Forum non conveniens finds no application and does not operate to divest Philippine tribunals of jurisdiction and
to require the application of foreign law. Forum non conveniens relates to forum, not to the choice of governing
law. That forum non conveniens may ultimately result in the application of foreign law is merely an incident of its
application.
M. In relation to entities with immunity
75. DFA v. NLRC
GR NO. 113191
September 18, 1996
Being an international organization that has been extended diplomatic status, the ADB is independent of the
municipal law. One of the basic immunities of an international organization is immunity from local jurisdiction, i.e.,
that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. The
obvious reason for this is that the subjection of such an organization to the authority of the local courts would
afford a convenient medium thru which the host government may interfere in their operations or even influence or
control its policies and decisions of the organization; besides, such subjection to local jurisdiction would impair the
capacity of such body to discharge its responsibilities impartially behalf of its member-states.
76. Lasco v. UNRF
GR NO. 109095
February 23, 1995
Immunity is necessary to assure unimpeded performance of their functions. The purpose is "to shield the affairs of
international organizations, in accordance with international practice, from political pressure or control by the host
country to the prejudice of member States of the organization, and to ensure the unhampered performance of
their functions." Our courts can only assume jurisdiction over private respondent if it expressly waived its
immunity. Clauses on jurisdictional immunity are now standard in the charters of the international organizations to
guarantee the smooth discharge of their functions.
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Clauses on jurisdictional immunity are now standard in the charters of the international organizations to guarantee
the smooth discharge of their functions.
77. US v. Guinto
GR NO. 76607
February 26, 1990
The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987
Constitution, is one of the generally accepted principles of international law that we have adopted as part of the
law of our land under Article II, Section 2. The consent of the state to be sued may be manifested expressly or
impliedly. However, not all contracts entered into by the government will operate as a waiver of its non-suability;
distinction must be made between its sovereign and proprietary acts.
There is no question that the United States of America, like any other state, will be deemed to have impliedly
waived its non-suability if it has entered into a contract in its proprietary or private capacity. And because the
activities of states have multiplied, it has been necessary to distinguish them — between sovereign and
governmental acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). A State may be said
to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to be
sued only when it enters into business contracts.
N. In relation to Cooperatives
78. Perpetual Help Credit Cooperative v. Faburada
GR NO. 12194
The Labor Arbiter has exclusive and original jurisdiction over disputes between cooperatives and its employees.
The pertinent provisions (Art. 121, Cooperative Code of the Philippines on procedures on how cooperative
disputes are to be resolved); and Sec. 8, Cooperative Development Authority Law on mediation and conciliation
before filing of appropriate action before the proper courts apply to members, officers and directors of the
cooperative involved in disputes within a cooperative or between cooperatives.
There is no evidence that private respondents are members of petitioner PHCCI and even if they are, the dispute
is about payment of wages, overtime pay, rest day and termination of employment. Under Art. 217 of the Labor
Code, these disputes are within the original and exclusive jurisdiction of the Labor Arbiter. Further bolstering the
point is that there is an employer-employee relationship, as determined through the four-fold test.
79. San Miguel v. Semillano
GR NO. 164257
July 5, 2010
The existence of an independent and permissible contractor relationship is generally established by the following
criteria: whether or not the contractor is carrying on an independent business; the nature and extent of the work;
the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece
of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing
and payment of the contractor's workers; the control of the premises; the duty to supply the premises, tools,
appliances, materials, and labor; and the mode, manner and terms of payment. Despite the fact that the service
contracts contain stipulations which are earmarks of independent contractorship, they do not make it legally so.
Upon finding that there is a labor-only contracting, and the respondents are employers of the principal, the
argument that the respondent is a member of the cooperative-contractor necessarily fails; then the LA has
jurisdiction over the matter.
80. Ellao v. Batangas I Electric Cooperative
GR NO. 209166
July 9, 2018
Complaints for illegal dismissal filed by a cooperative officer constitute an intra-cooperative controversy,
jurisdiction over which belongs to the RTCs.
A cooperative, as defined under PD 269 refers to a “corporation organized under RA 6038.” Even without
choosing to convert and register as a stock corporation before the SEC, electric cooperatives already enjoy
powers and corporate existence akin to a corporation. As a rule, the illegal dismissal of an officer or other
employee of a private employer is properly cognizable by the labor arbiter pursuant to Article 217 (a) 2 of the
Labor Code, as amended. By way of exception, where the complaint for illegal dismissal involves a corporate
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officer, the controversy falls under the jurisdiction of the SEC (now RTC), because the controversy arises out of
intra-corporate or partnership relations.
3. Proceedings before the Labor Arbiter
A. Construction of the Rules and suppletory application of the Rules of Court
81. Beltran v. AMA Computer College
GR NO. 223795
April 3, 2019
The quantum of proof necessary to establish one's claims in labor and administrative cases is substantial
evidence, or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion even if other equally reasonable minds might conceivably opine otherwise. Contrary to the findings of
the NLRC and CA, the Court holds that the affidavits and other supporting documents submitted by petitioner
substantially proved that AMA had a consistent company practice of granting early retirement to its employees
who have rendered at least 10 years of service.
The NLRC is allowed more latitude in the application of its rules. Technical rules of procedure may be relaxed in
the interest of substantial justice and to assist the parties in obtaining just, expeditious and inexpensive resolution
and settlement of labor disputes. Subject to rules of reason and fair play, this liberal policy of procedural rules is
qualified by two requirements: (1) a party should adequately explain any delay in the submission of evidence; and
(2) a party should sufficiently prove the allegations sought to be proven.
82. Daikoku Electronics v. Raza
GR NO. 181688
June 5, 2009
Section 15, Rule VII of the NLRC 2005 Rules of Procedure pertinently provides:
SEC. 15. Motions For Reconsideration. — Motions for reconsideration of any decision, resolution or order of the Commission shall
not be entertained except when based on palpable or patent errors; provided that the motion is . . .fi​ led within ten (10) calendar days
from receipt of decision, resolution or order, with proof of service that a copy of the same has been furnished, within the
reglementary period, the adverse party; and provided further, that only one such motion from the same party shall be entertained.
The relaxation of procedural rules cannot be made without any valid reasons proffered for or underpinning it. To
merit liberality, petitioner must show reasonable cause justifying its non-compliance with the rules and must
convince the Court that the outright dismissal of the petition would defeat the administration of substantive justice.
The bare invocation of "the interest of substantial justice" line is not some magic wand that will automatically
compel this Court to suspend procedural rules. Procedural rules are not to be belittled, let alone dismissed simply
because their non-observance may have resulted in prejudice to a party's substantial rights.
B. Pleadings, notices, and appearances
i. Complaint
83. Samar-Med Distribution v. NLRC
GR NO. 162385
July 15, 2013
The complaint is a mere checklist of possible causes of action that he might have against the defendant.. The
non-inclusion in the complaint of the issue on the dismissal did not necessarily mean that the validity of the
dismissal could not be an issue.
The rules of the NLRC require the submission of verified position papers by the parties should they fail to agree
upon an amicable settlement, and bar the inclusion of any cause of action not mentioned in the complaint or
position paper from the time of their submission by the parties. In view of this, Gutang's cause of action should be
ascertained not from a reading of his complaint alone but also from a consideration and evaluation of both his
complaint and position paper.
84. Our Haus Realty Development Corporation v. Parian
GR NO. 204651
August 6, 2014
A claim not raised in the pro forma complaint may still be raised in the position paper. The Court agree with the
CA that such omission does not bar the labor tribunals from touching upon this cause of action since this was
raised and discussed in the respondents’ position paper. The rules of the NLRC require the submission of verified
position papers by the parties should they fail to agree upon an amicable settlement, and bar the inclusion of any
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cause of action not mentioned in the complaint or position paper from the time of their submission by the parties.
As such, the cause of action should be ascertained not from a reading of the complaint alone but also from a
consideration and evaluation of both the complaint and position paper.
85. Dee Jay’s Inn v. Raneses
GR NO. 191823
October 5, 2016
Rule V Sec. 4 of the NLRC Rules of Procedure provides that the Labor Arbiter shall direct both parties to submit
simultaneously their ostion papers with supporting documents and affidavits within an inextendible period of 10
days from notice of termination of the mandatory conference. These verified position papers to be submitted shall
cover only those claims and causes of action raised in the complaint excluding those that may have been
amicably settled, and shall be accompanied by all supporting documents including the affidavits of their respective
witnesses which shall take the place of the latter's direct testimony.
The complaint is not the only document from which the complainant's cause of action is determined in a labor
case. Any cause of action that may not have been included in the complaint or position paper, can no longer be
alleged after the position paper is submitted by the parties. In other words, the filing of the position paper is the
operative act which forecloses the raising of other matters constitutive of the cause of action. This necessarily
implies that the cause of action is finally ascertained only after both the complaint and position paper are properly
evaluated.
ii. Filing and service of pleadings
86. Charter Chemical v. Tan
GR NO. 163891
May 21, 2009
The established rule is that the date of delivery of pleadings to a private letter-forwarding agency is not to be
considered as the date of filing thereof in court, and that in such cases, the date of actual receipt by the court, and
not the date of delivery to the private carrier, is deemed the date of filing of that pleading. When such was not
made within the reglementary period to perfect an appeal, it renders the assailed decision final and executory and
deprives the appellate court of jurisdiction to alter the judgment, much less to entertain the appeal. The 10-day
reglementary period to perfect an appeal is mandatory and jurisdictional in nature.
iii. Services of notices, resolutions, and orders
87. Sy v. Fairland Knitcraft
GR NO. 182915
December 12, 2011
Article 224 contemplates the furnishing of copies of final decisions, orders or awards both to the parties and their
counsel in connection with the execution of such final decisions, orders or awards. However, for the purpose of
computing the period for filing an appeal from the NLRC to the CA, same shall be counted from receipt of the
decision, order or award by the counsel of record pursuant to the established rule that notice to counsel is notice
to party. Therefore, the reckoning period for their finality is likewise the counsel's date of receipt thereof, if a party
is represented by counsel. Hence, the date of receipt referred to in Sec. 14, Rule VII of the then in force New
Rules of Procedure of the NLRC which provides that decisions, resolutions or orders of the NLRC shall become
executory after 10 calendar days from receipt of the same, refers to the date of receipt by counsel.
iv. Appearances and authority to bind
88. Gudez v. NLRC
GR NO. 83023
March 23, 1990
administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure in the
adjudication of cases. However, the rule on substitution of counsel or employment of additional counsel is still
observed in labor cases. Thus, there can be no valid substitution of counsel until the prescribed procedure is
followed, to wit:
1) there must be filed a written application for substitution;
2) there must be filed the written consent of the client to the substitution;
3) there must be filed the written consent of the attorney to be substituted, if such consent can be obtained;
and
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4) in case such written consent cannot be procured, there must be filed with the application for substitution,
proof of the service of notice of such motion in the manner required by the rules on the attorney to be
substituted.
If it is not shown that the above procedure had been complied with, there was no valid substitution of counsel and
hence the counsel for respondent RAPSA is not authorized to appeal for and in behalf of respondent Crisologo.
C. Venue
89. Philtranco Service Enterprises v. NLRC
GR NO. 124100
April 1, 1998
The Court has previously declared 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. Provisions on venue are
intended to assure convenience for the plaintiff and his witnesses and to promote the ends of justice. In fact,
Section 1(a), Rule IV of the New Rules of Procedure of the NLRC, speaks of the complainant/petitioner's
workplace, evidently showing that the rule is intended for the exclusive benefit of the worker. This being the case,
the worker may waive said benefit. Furthermore, the aforesaid Section has been declared by this Court to be
merely permissive. Said section uses the word "may," allowing a different venue when the interests of substantial
justice demand a different one.
D. Consolidation of cases
E. Issuance and service of summons
i. Contents of summons
ii. How summons is effected
iii. Validity of Summons
90. Pabon v. NLRC
GR NO. 120457
September 24, 1998
Courts acquire jurisdiction over the person of a party-defendant by virtue of the service of summons in the manner
required by law. In the case at bar, although as a rule, modes of service of summons are strictly followed in order
that the court may acquire jurisdiction over the person of a defendant, such procedural modes, however, are
liberally construed in quasi-judicial proceedings, as in this case, substantial compliance with the same being
considered adequate. The rationale of all rules with respect to service of process on a corporation is that such
service must be made to an agent of a representative so integrated with the corporation sued as to make it a priori
supposable that he will realize his responsibilities and know what he should do with any legal papers served on
him.
A bookkeeper can be considered as an agent of private respondent corporation within the purview of Section 13,
Rule 14 of the old Rules of Court. Although it may be true that the service of summons was made on a person not
authorized to receive the same in behalf of the petitioner, nevertheless since it appears that the summons and
complaint were in fact received by the corporation through its said clerk, the Court finds that there was a
substantial compliance with the rule on service of summons. Indeed the purpose of said rule as above stated to
assure service of summons on the corporation had thereby been attained. The need for speedy justice must
prevail over technicality.
91. Masagana Concrete Products v. NLRC
GR NO. 106916
September 3, 1999
The registry return receipt states that "a registered article must not be delivered to anyone but the addressee, or
upon the addressee's written order." Thus, the persons who received the notice were presumably able to present
a written authorization to receive the same and we can assume that the notices were duly received in the ordinary
course of events.
It is a legal presumption, born of wisdom and experience, that official duty has been regularly performed; that the
proceedings of a judicial tribunal are regular and valid, and that judicial acts and duties have been and will be duly
and properly performed. The burden of proving the irregularity in official conduct, if any, is on the part of
petitioners who in this case clearly failed to discharge the same. The return is prima facie proof of the facts
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indicated therein and service by registered mail is deemed completed even only upon receipt by an agent of the
addressee. There was then sufficient compliance with the procedure for service of summons and/or notices of the
scheduled hearings upon the petitioners.
92. Landbank v. Heris Alsua
GR NO. 167361
April 2, 2007
All that the rules of procedure require in regard to service by registered mail is to have the postmaster deliver the
same to the addressee himself or to a person of sufficient discretion to receive the same. The paramount
consideration is that the registered mail is delivered to the recipient’s address and received by a person who
would be able to appreciate the importance of the papers delivered to him, even if that person is not a subordinate
or employee of the recipient or authorized by a special power of attorney.
In this case, case, the receipt by the security guard of the order of dismissal should be deemed receipt by
petitioner’s counsel as well. Petitioner’s admission that there were instances in the past when the security guard
received notices for petitioner LBP only underscores the fact that the security guard who received the order of
dismissal fully realized his responsibility to deliver the mails to the intended receipient, as it did without delay.
93. Oyster Plaza Hotel v. Melivo
GR NO. 217455
October 5, 2016
In quasi-judicial proceedings before the NLRC and its arbitration branch, procedural rules governing service of
summons are not strictly construed. Substantial compliance thereof is sufficient. The constitutional requirement of
due process with respect to service of summons only exacts that the service of summons be such as may
reasonably be expected to give the notice desired. Once the service provided by the rules reasonably
accomplishes that end, the requirement of justice is answered, the traditional notion of fair play is satisfied, and
due process is served.
In this case, the summons and notices were served by registered mail at the petitioners' place of business. Thus,
the person who received the same was presumed authorized to do so. Consequently, the summons and notices
were presumed to be duly served. The burden of proving the irregularity in the service of summons and notices, if
any, is on the part of the petitioners. In this case, the petitioners clearly failed to discharge that burden.
F. Prohibited Pleadings and Motions
G. Motion to dismiss
H. Mandatory Concilliation and Mediation Conference (Sec. 8, Rule V)
I. Amendment of Complaint/Petition
J. Submission of Position Papers and reply
i. Effect of failure to file
ii. Contents of position paper and reply
94. Magnolia Corporation v. NLRC
GR NO. 116813
November 24, 1995
The New Rules of Procedure of the NLRC prohibit parties from making new allegations or cause of action not
included in the complaint or position papers, affidavits and other documents. In the instant case, private
respondent raised the issue of unfair labor practice only after the parties have submitted their respective position
papers.
Verified position papers shall cover only those claims and causes of action raised in the complaint excluding those
that may have been amicably settled,and shall be accompanied by all supporting documents including the
affidavits of their respective witnesses which shall take the place of the latter's direct testimony. The parties shall
thereafter not be allowed to allege facts, or present evidence to prove facts, not referred to and any cause or
causes of action not included in the complaint or position papers, affidavits and other documents. Unless
otherwise requested in writing by both parties to submit simultaneously their position papers/memorandum with
the supporting documents and affidavits within fifteen (15) calendar days from the date of the last conference, with
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proof of having furnished each other with copies thereof.” Petitioners cannot be found guilty of unfair labor
practice on the basis of an allegation sneaked in the Reply of the private respondent, for such charge cannot be
taken lightly, as it entails violations not only of the civil rights but are also criminal offenses subject to prosecution
and punishment.
K. Hearing or Clarificatory Conference
L. Death of Parties
95. Fontana Development Corporation v. Vukasinovic
GR NO. 222424
2016
An illegal dismissal is an action that does not survive the death of the accused.
September 21,
The question as to whether an action survives or not depends on the nature of the action and the damage sued
for. In the causes of action which survive, the wrong complained [of] affects primarily and principally property and
property rights, the injuries to the person being merely incidental, while in the causes of action which do not
survive, the injury complained of is to the person, the property and rights of property affected being incidental.
Since the property and property rights of the respondent is only incidental to his complaint for illegal dismissal, the
same does not survive his death.
E. National Labor Relations Commission (NLRC)
1. Powers of the Commission (Art. 225)
96. Robosa v. NLRC
GR NO. 176085
February 8, 2012
Under Article 218 of the Labor Code, the NLRC (and the labor arbiters) may hold any offending party in contempt,
directly or indirectly, and impose appropriate penalties in accordance with law. The penalty for direct contempt
consists of either imprisonment or fine, the degree or amount depends on whether the contempt is against the
Commission or the labor arbiter. The Labor Code, however, requires the labor arbiter or the Commission to deal
with indirect contempt in the manner prescribed under Rule 71 of the Rules of Court.
Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect contempt
proceedings before the trial court. This mode is to be observed only when there is no law granting them contempt
powers. As is clear under Article 218(d) of the Labor Code, the labor arbiter or the Commission is empowered or
has jurisdiction to hold the offending party or parties in direct or indirect contempt.
Contempt is still a criminal proceeding in which acquittal, for instance, is a bar to a second prosecution. The
distinction is for the purpose only of determining the character of punishment to be administered. Dismissal of a
contempt charge then is not appealable.
97. Yupangco Cotton Mills v. CA
GR NO. 126322
January 16, 2002
A third party whose property has been levied upon by a sheriff to enforce a decision against a judgment debtor is
afforded with several alternative remedies to protect its interests. The third party may avail himself of alternative
remedies cumulatively, and one will not preclude the third party from availing himself of the other alternative
remedies in the event he failed in the remedy first availed of. Thus, a third party may avail himself of the following
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.
The remedies above mentioned are cumulative and may be resorted to by a third-party claimant independent of or
separately from and without need of availing of the others. If a third-party claimant opted to file a proper action to
vindicate his claim of ownership, he must institute an action, distinct and separate from that in which the judgment
is being enforced, with the court of competent jurisdiction even before or without need of filing a claim in the court
which issued the writ, the latter not being a condition sine qua non for the former.
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98. Ando v. Campo
GR NO. 184007
February 16, 2011
Re: jurisdiction over third party claims
Regular courts have no jurisdiction to hear and decide questions which arise from and are incidental to the
enforcement of decisions, orders, or awards rendered in labor cases by appropriate officers and tribunals of the
Department of Labor and Employment. To hold otherwise is to sanction splitting of jurisdiction which is obnoxious
to the orderly administration of justice. The subject matter of petitioner's complaint is the execution of the NLRC
decision. Execution is an essential part of the proceedings before the NLRC. Jurisdiction, once acquired,
continues until the case is finally terminated, and there can be no end to the controversy without the full and
proper implementation of the commission's directives.
ART. 254. INJUNCTION PROHIBITED. - No temporary or permanent injunction or restraining order in
​ any case involving or growing
out of labor disputes shall be issued by any court or other entity,​ except as otherwise provided in Articles 218 and 264 of this Code.
Re: extent of execution of judgement
The power of the NLRC to execute its judgment extends only to properties unquestionably belonging to the
judgment debtor alone. Thus, a sheriff has no authority to attach the property of any person except that of the
judgment debtor.
2. Exclusive original jurisdiction
A. Petition for injunction in ordinary labor disputes [Art. 225(e)]
99. PAL v. NLRC
GR NO. 120567
March 20, 1998
Generally, injunction is a preservative remedy for the protection of one's substantive rights or interest. It is not a
cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The essential conditions for
granting such temporary injunctive relief are:
a) that the complaint alleges facts which appear to be sufficient to constitute a proper basis for injunction
and
b) that on the entire showing from the contending parties, the injunction is reasonably necessary to protect
the legal rights of the plaintiff pending the litigation.
Article 218 of the Labor Code empowers the NLRC “​[t]o 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 i​ n 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​; . . ."
Sec. 1, Rule XI of the New Rules of Procedure of the NLRC, pertinently provides as follows: A preliminary
injunction may be granted 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 and that ​it may be exercised by the Labor Arbiter ​only as an incident to the cases pending
before them in order to preserve the rights of the parties during the pendency of the case, but excluding labor
disputes involving strikes or lockout.
Taking into account the foregoing definitions, it is an essential requirement that there must first be a labor dispute
between the contending parties before the labor arbiter. Article 218(e) then 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." NLRC has only exclusive appellate jurisdiction over all cases decided by the labor arbiters in their
exclusive and original jurisdiction; and NLRC can only issue injunction in labor disputes before it.
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100. Frondozo v. Meralco
GR NO. 178379
August 22, 2017
There are instances when writs of execution may be assailed. They are:
1) the writ of execution varies the judgment;
2) there has been a change in the situation of the parties making execution inequitable or unjust;
3) execution is sought to be enforced against property exempt from execution;
4) it appears that the controversy has been submitted to the jThe perfection of an appeal is a mandatory
requirement, which cannot be trifled as a mere technicality to suit the interest of a partyudgment of the
court;
5) the terms of the judgment are not clear enough and there remains room for interpretation thereof; or
6) it appears that the writ of execution has been improvidently issued, or that it is defective in substance, or
issued against the wrong party, or that the judgment debt has been paid or otherwise satisfied, or the writ
was issued without authority.
101. Bisig Manggagawa sa Concrete Aggregates v. NLRC
GR NO. 105090
September 16,
1993
The issuance of an ex parte temporary restraining order in a labor dispute is not per se prohibited. Its issuance,
however, should be characterized by care and caution for the law requires that it be clearly justified by
considerations of extreme necessity, i.e., when the commission of unlawful acts is causing substantial and
irreparable injury to company properties and the company is, for the moment, bereft of an adequate remedy at
law. This is as it ought to be, for imprudently issued temporary restraining orders can break the back of
employees engaged in a legal strike.
The substantive and procedural requirements under Art. 218(e) of the Labor Code must be strictly complied with
before a temporary or permanent injunction can issue in a labor dispute, viz:
1)
2)
3)
4)
5)
6)
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 complainants 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 defenc​ omplainant has no adequate remedy at law; and
That the public officers charged with the duty to protect complainants property are unable or unwilling to furnish adequate protection.
dants by the granting of relief;
That
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 have been threatened or committed charged with the duty to protect complainant's property x x x”
B. Petition for Injunction in strikes and lockouts
C. Certified Cases (Rule VIII, NLRC Rules of Procedure)
3. Exclusive Appellate Jurisdiction
A. Appeal in Contempt Cases before the Labor Arbiter
B. Appeal in small money claims resolved by the DOLE Regional Director or hearing officer
C. Appeal in cases decided by the Labor Arbiter
4. ​Grounds for Appeal
5. Requisites for perfecting an appeal
A. Filed within the reglementary period
102. Calipay v. NLRC
GR NO. 166411
August 3, 2010
It is doctrinally entrenched that appeal is not a constitutional right, but a mere statutory privilege. Hence, parties
who seek to avail themselves of it must comply with the statutes or rules allowing it.Procedural rules setting the
period for perfecting an appeal or filing a petition for review are generally inviolable. The perfection of an appeal in
the manner and within the period permitted by law is not only mandatory, but also jurisdictional. Failure to perfect
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the appeal renders the judgment of the court final and executory. It is true that procedural rules may be waived or
dispensed with in the interest of substantial justice. This Court may deign to veer away from the general rule if, on
its face, the appeal appears to be absolutely meritorious.
103. Building Care Corporation v. Macaraeg
GR NO. 198357
December 10, 2012
The relaxation of procedural rules in the interest of justice was never intended to be a license for erring litigants to
violate the rules with impunity. Liberality in the interpretation and application of the rules can be invoked only in
proper cases and under justifiable causes and circumstances. In ​Gaudiano v Benemerito​, the Court held that the
perfection of an appeal within the period and in the manner prescribed by law is jurisdictional and non-compliance
with such legal requirements is fatal and has the effect of rendering the judgment final and executory. The
limitation on the period of appeal is not without reason. They must be strictly followed as they are considered
indispensable to forestall or avoid unreasonable delays in the administration of justice, to ensure an orderly
discharge of judicial business, and to put an end to controversies.
Clearly, allowing an appeal, even if belatedly filed, should never be taken lightly. The judgment attains finality by
the lapse of the period for taking an appeal without such appeal or motion for reconsideration being filed.
B. Verified by the appellant himself/herself in accordance with Sec. 4 Rule 7 of the Rules of Court
104. Innodata Knowledge Services, Inc. v. Inting
GR NO. 211892
December 6, 2017
The Court has previously set the guidelines pertaining to non-compliance with the requirements on, or submission
of defective, verification and certification against forum shopping:
1) A distinction must be made between non-compliance with the requirement on or submission of defective
verification, and noncompliance with the requirement on or submission of defective certification against
forum shopping;
2) As to verification, non-compliance therewith or a defect therein does not necessarily render the pleading
fatally defective. The court may order its submission or correction, or act on the pleading if the attending
circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends
of justice may be served;
3) Verification is deemed substantially complied with when one who has ample knowledge to swear to the
truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the
petition have been made in good faith or are true and correct;
4) As to certification against forum shopping, non-compliance therewith or a defect therein, unlike in
verification, is generally not curable by its subsequent submission or correction thereof, unless there is a
need to relax the Rule on the ground of substantial compliance or the presence of special circumstances
or compelling reasons;
5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case;
otherwise, those who did not sign will be dropped as parties to the case. Under reasonable or justifiable
circumstances, however, as when all the plaintiffs or petitioners share a common interest and invoke a
common cause of action or defense, the signature of only one of them in the certification against forum
shopping substantially complies with the Rule; and
6) Finally, the certification against forum shopping must be executed by the party pleader, not by his
counsel. If, however, for reasonable or justifiable reasons, the party-pleader is unable to sign, he must
execute a Special Power of Attorney designating his counsel of record to sign on his behalf.
In the case at hand, only twelve (12) of respondents were able to sign the Verification and Certification Against
Forum Shopping since they were only given ten (10) days from the receipt of the LA's decision to perfect an
appeal. Some of them were even no longer based in Cebu City. But it does not mean that those who failed to sign
were no longer interested in pursuing their case. In view of the circumstances of this case and the substantive
issues raised by respondents, the Court finds justification to liberally apply the rules of procedure to the present
case.
C. Memorandum of appeal stating the grounds of the appeal, arguments, relief sought, and date of receipt of the appealed
decision, award, or oder.
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D. Proof of payment of appeal fee and legal research fee
105. Luna v. NLRC
GR NO. 116404
March 20, 1997
Under the rules of the NLRC, an appeal from the Labor Arbiter's decision to the NLRC may be taken
1) by filing a verified memorandum of appeal; and
2) by paying the appeal fees filed within ten (10) calendar days from receipt of a decision, award or order of
the Labor Arbiter.
Both requisites must be satisfied, otherwise the running of the prescriptive period for perfecting an appeal will not
be tolled. Records do not support that petitioners paid the appeal fees on April 26, 1993 together with the filing of
their appeal memorandum. What appears instead is that they paid the fees only on May 5, 1993, nine days after
the expiration date of the reglementary period, As payment of the requisite appeal fees is an indispensable and
jurisdictional requisite and not a mere technicality of law or procedure, and as the failure to comply with this
requirement renders the decision of the court final, we hold that the NLRC correctly dismissed petitioners' appeal.
Indeed, appeal is only a statutory privilege and therefore it may only be exercised in the manner provided by law.
E. Posting of an appeal bond
106. Toyota Alabang v. Games
GR NO. 206612
August 17, 2005
Article 223 of the Labor Code and Section 6, Rule VI of the 2011 NLRC Rules of Procedure, uniformly state thus:
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 bond, which shall either be in the form of cash deposit or surety bond
equivalent in amount to the monetary award, exclusive of damages and attorney's fees.
Evidently, the above rules do not limit the appeal bond requirement only to certain kinds of rulings of the LA.
Rather, these rules generally state that in case the ruling of the LA involves a monetary award, an employer's
appeal may be perfected only upon the posting of a bond. Therefore, absent any qualifying terms, so long as the
decision of the LA involves a monetary award, as in this case, that ruling can only be appealed after the employer
posts a bond. If to construe otherwise, then an aggrieved party may simply seek the quashal of a writ of
execution, instead of going through the normal modes of appeal, to altogether avoid paying for an appeal bond.
Re: Finality of judgement
Jurisprudence dictates that a final and executory decision of the LA can no longer be reversed or modified. After
all, just as a losing party has the right to file an appeal within the prescribed period, so does the winning party
have the correlative right to enjoy the finality of the resolution of the case.
107. GBMLT Manpower v. Malinao
GR NO. 189262
July 6, 2015
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in
the amount equivalent to the monetary award in the judgment appealed from The requirement of an appeal bond
is further emphasized in Section 6, Rule VI of the 2011 NLRC Rules of Procedure. This provision clarifies that
damages and attorney's fees awarded by the labor arbiter shall not be included in the computation of the bond to
be posted.
In several pronouncements, this Court has adopted a particular understanding of the word "only" in the phrase "an
appeal by the employer may be perfected only upon the posting of a cash or surety bond." It has regarded the
phrase as the legislative's unequivocal declaration that the posting of a cash or surety bond is the exclusive
means by which an employer's appeal from a labor arbiter's decision may be perfected. Jurisprudence dictates
that the appeal bond requirement for judgments involving monetary awards may be relaxed in meritorious cases,
as in instances when a liberal interpretation would serve the desired objective of resolving controversies on the
merits. In this case, the Court noted that its payment of the appeal bond through the issuance of a check was not
even an issue before the NLRC. The latter had given due course to petitioner's appeal without any indication of
having found any defect in the appeal bond posted. Hence, the appeal has been perfected by virtue of its
compliance with the appeal bond requirement.
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108. Orozco v. CA
GR NO. 155207
April 29, 2005
As a rule, compliance with the requirements for the perfection of an appeal within the reglementary period is
mandatory and jurisdictional. However, in ​National Federation of Labor Unions v. Ladrido ​as well as in several
other cases, the Court postulated that "private respondents cannot be expected to post such appeal bond
equivalent to the amount of the monetary award ​when the amount thereof was not included in the decision of the
labor arbiter.​" The computation of the amount awarded to petitioner not having been clearly stated in the decision
of the labor arbiter, private respondents had no basis for determining the amount of the bond to be posted. While
the posting of a cash or surety bond is jurisdictional and is a condition sine qua non to the perfection of an appeal,
there is a plethora of jurisprudence recognizing exceptional instances wherein the Court relaxed the bond
requirement as a condition for posting the appeal.
109. Lepanto Consolidated Mining v. Icao
GR NO. 196047
January 15, 2014
Instead of posting a cash or surety bond, Petitioner filed a Consolidated Motion praying that the cash bond it had
previously posted in another labor case be released and applied to the present one. Under the Rule VI, Section 6
of the 2005 NLRC Rules, "a cash or surety bond shall be valid and effective from the date of deposit or posting,
until the case is finally decided, resolved or terminated, or the award satisfied." Hence, it is clear that a bond is
encumbered and bound to a case only for as long as:
1) the case has not been finally decided, resolved or terminated; or
2) the award has not been satisfied. Therefore, once the appeal is finally decided and no award needs to be
satisfied, the bond is automatically released.
Since the money is now unencumbered, the employer who posted it should now have unrestricted access to the
cash which he may now use as he pleases as appeal bond in another case, for instance. This is what petitioner
simply did. when the law does not clearly provide a rule or norm for the tribunal to follow in deciding a question
submitted, but leaves to the tribunal the discretion to determine the case in one way or another, the judge must
decide the question in conformity with justice, reason and equity, in view of the circumstances of the case. There
is substantial compliance with the mandatory requirements of posting an appeal bond.
110. Forever Security v. Flores
GR NO. 147961
September 7, 2007
The requirement of a cash or surety bond for the perfection of an appeal from the Labor Arbiter's monetary award
is not only mandatory but jurisdictional as well, and noncompliance therewith is fatal and has the effect of
rendering the award final and executory. The logical purpose of an appeal bond is to insure, during the period of
appeal, against any occurrence that would defeat or diminish recovery under the judgment if subsequently
affirmed; it also validates and justifies, at least prima facie, an interpretation that would limit the amount of the
bond to the aggregate of the sums awarded other than in the concept of moral and exemplary damages.
111. UERM Memorial Medical Center v. NLRC
GR NO. 110419
March 3, 1997
The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by the
employer is underscored by the provision that an appeal by the employer may be perfected "only upon the posting
of a cash or surety bond." The word "only" makes it perfectly clear, that the lawmakers intended the posting of a
cash or surety bond by the employer to be the exclusive means by which an employer's appeal may be perfected.
However, it is the current policy is not to strictly follow technical rules but rather to take into account the spirit and
intention of the Labor Code. In the case at bar, the ​real property bond posted by petitioners sufficiently protects
the interests of private respondents should they finally prevail.
112. Manila Mining Co. v. Amor
GR NO. 182800
April 20, 2015
Section 6, Rule VI of the NLRC Rules of Procedure provides that 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.
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Respondent correctly called attention to the fact that the check submitted by petitioner was dishonored upon
presentment for payment, thereby rendering the tender thereof ineffectual. Having filed its motion and
memorandum on the very last day of the reglementary period for appeal, moreover, petitioner had no one but
itself to blame for failing to post the full amount pending the NLRC’s action on its motion for reduction of the
appeal bond.
113. Banahaw Broadcasting v. Pacana
GR NO. 171673
May 30, 2011
Re: requirement to a GOCC to post appeal bond
As a general rule, the government and all the attached agencies with no legal personality distinct from the former
are exempt from posting appeal bonds, whereas government-owned and controlled corporations (GOCCs) are not
similarly exempted. When the State litigates, it is not required to put up an appeal bond because it is presumed to
be always solvent. This exemption, however, does not, as a general rule, apply to GOCCs for the reason that the
latter has a personality distinct from its shareholders. Thus, while a GOCC’s majority stockholder, the State, will
always be presumed solvent, the presumption does not necessarily extend to the GOCC itself.
However, when a GOCC becomes a "government machinery to carry out a declared government policy,” it
becomes similarly situated as its majority stockholder as there is the assurance that the government will
necessarily fund its primary functions. Thus, a GOCC that is sued in relation to its governmental functions may be,
under appropriate circumstances, exempted from the payment of appeal fees. Here, petitioner was organized as a
private corporation, sequestered in the 1980’s and the ownership of which was subsequently transferred to the
government. Its primary function is to engage in commercial radio and television broadcasting, a purely
commercial or proprietary one and not governmental. As such, BBC cannot be deemed entitled to an exemption
from the posting of an appeal bond.
Re: Motion for Recomputation
The posting of the appeal bond within the period provided by law is not merely mandatory but jurisdictional. The
failure on the part of BBC to perfect the appeal thus had the effect of rendering the judgment final and executory.
Neither was there an interruption of the period to perfect the appeal when BBC filed (1) its Motion for the
Recomputation of the Monetary Award in order to reduce the appeal bond, and (2) its Motion for Reconsideration
of the denial of the same. In the case at bar, BBC already took a risk when it filed its Motion for the
Recomputation of the Monetary Award without posting the bond itself.
114. McBurnie v. Ganzon
GR NO. 178034
October 17, 2013
The Court must give utmost regard to the legislative and administrative intent to strictly require the employer to
post a cash or surety bond securing the full amount of the monetary award within the 10-day reglementary period.
However, there are two conditions where a bond may be reduced upon motion by the employer:
1) the motion to reduce the bond shall be based on ​meritorious grounds​; and
2) a​ reasonable amount​ in relation to monetary award is posted by the appellant.
Guidelines that are applicable in the reduction of appeal bonds were also explained in Nicol v. Footjoy Industrial
Corporation.
The bond requirement in appeals involving monetary awards has been and may be relaxed in meritorious cases,
including instances in which:
1) there was substantial compliance with the Rules;
2) surrounding facts and circumstances constitute meritorious grounds to reduce the bond;
3) a liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving
controversies on the merits; or
4) the appellants, at the very least, exhibited their willingness and/or good faith by posting a partial bond
during the reglementary period.
The filing of a motion to reduce bond, coupled with compliance with the two conditions shall suffice to suspend the
running of the period to perfect an appeal from the labor arbiter’s decision to the NLRC. For purposes of
determining a “meritorious ground”, the NLRC is not precluded from receiving evidence, or making a preliminary
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determination of the merits of the appellant’s contentions. It is discretionary for the court to accept the merit of the
grounds. What constitutes a “reasonable amount” of the bond shall be based primarily on the merits of the motion
and the main appeal.
To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the chance
to seek a reduction of the appeal bond are effectively carried out, without however defeating the benefits of the
bond requirement in favor of a winning litigant, all motions to reduce bond that are to be filed with the NLRC shall
be accompanied by the posting of a cash or surety bond equivalent to 10% of the monetary award that is subject
of the appeal, which shall provisionally be deemed the reasonable amount of the bond in the meantime that an
appellant motion is pending resolution by the Commission. The foregoing shall not be misconstrued to unduly
hinder the NLRC exercise of its discretion, given that the percentage of bond that is set by this guideline shall be
merely provisional. The NLRC retains its authority and duty to resolve the motion and determine the final amount
of bond that shall be posted by the appellant, still in accordance with the standards of meritorious grounds and
reasonable amount
115. Sara Lee Philippines v. Macatlang
GR NO. 180147
January 14, 2015
The 10% requirement pertains to the reasonable amount which the NLRC would accept as the minimum of the
bond that should accompany the motion to reduce bond in order to suspend the period to perfect an appeal under
the NLRC rules. The 10% is based on the judgment award and should in no case be construed as the minimum
amount of bond to be posted in order to perfect appeal.
The NLRC retains its authority and duty to resolve the motion and determine the final amount of bond that shall be
posted by the appellant, still in accordance with the standards of "meritorious grounds" and "reasonable amount."
Should the NLRC, after considering the motion’s merit, determine that a greater amount or the full amount of the
bond needs to be posted by the appellant, then the party shall comply accordingly. The appellant shall be given a
period of 10 days from notice of the NLRC order within which to perfect the appeal by posting the required appeal
bond.
116. AFP General Insurance Corporation v. Molina
GR NO. 151133
June 30, 2008
The instant case pertains to a surety bond; thus, the applicable provision of the Insurance Code is Section 177,
which specifically governs suretyship. It provides that a surety bond, once accepted by the obligee becomes valid
and enforceable, irrespective of whether or not the premium has been paid by the obligor. The bond is both valid
and enforceable.
When petitioner surety company cancelled the surety bond because Radon Security failed to pay the premiums, it
gave due notice to the latter but not to the NLRC. By its failure to give notice to the NLRC, AFPGIC failed to
acknowledge that the NLRC had jurisdiction not only over the appealed case, but also over the appeal bond. This
oversight amounts to disrespect and contempt for a quasi-judicial agency tasked by law with resolving labor
disputes. Until the surety is formally discharged, it remains subject to the jurisdiction of the NLRC.
F. Proof of service upon the other parties
117. Sunrise Manning Agency v. NLRC
GR NO. 146703
November 18, 2004
Re: propriety of appeal when no memorandum of appeal was served upon the opposing party
It has long been settled that mere failure to serve a copy of a memorandum of appeal upon the opposing party
does not bar the NLRC from entertaining an appeal. In its prior rulings, the Court ruled that the appellant's failure
to furnish copy of his memorandum appeal to respondent is not a jurisdictional defect, and does not justify
dismissal of the appeal. Thus, the failure to give a copy of the appeal to the adverse party was a mere formal
lapse, an excusable neglect.
Re: on allegations of lack of due process
Considering that the entire record of a case on appeal is open for review by the NLRC, and that herein petitioner
was afforded a fair opportunity to be heard when it filed a motion for reconsideration after receiving a copy of the
first NLRC resolution, it cannot validly claim that it was deprived of due process. In limiting its motion for
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reconsideration to procedural issues, petitioner effectively waived its opportunity to be heard on the merits of the
case. It was thus not deprived of its right to due process
118. EDI Staffbuilders International v. NLRC
GR NO. 145587
October 26, 2007
the doctrine that evolved from these cases is that failure to furnish the adverse party with a copy of the appeal is
treated only as a formal lapse, an excusable neglect, and hence, not a jurisdictional defect. Accordingly, in such a
situation, the appeal should not be dismissed; however, it should not be given due course either. As enunciated in
J.D. Magpayo v. NLRC, the duty that is imposed on the NLRC, in such a case, is to require the appellant to
comply with the rule that the opposing party should be provided with a copy of the appeal memorandum. While
Gran's failure to furnish EDI with a copy of the Appeal Memorandum is excusable, the abject failure of the NLRC
to order Gran to furnish EDI with the Appeal Memorandum constitutes grave abuse of discretion.
119. Fernandez v. Botica Claudio
GR NO. 205870
13 August 2014
While Article 223 of the Labor Code and Section 3(a), Rule VI of the then New Rules of Procedure of the
NLRC[48] require the party intending to appeal from the LA's ruling to furnish the other party a copy of his
memorandum of appeal, the Court has held that the mere failure to serve the same upon the opposing party does
not bar the NLRC from giving due course to an appeal. Such failure is only treated as a formal lapse, an
excusable neglect, and, hence, not a jurisdictional defect warranting the dismissal of an appeal. Instead, the
NLRC should require the appellant to provide the opposing party copies of the notice of appeal and memorandum
of appeal.
NLRC though could not be expected to require compliance from the petitioner, since it was not aware that the
respondent was not notified of her appeal; it cannot be faulted in relying with Fernandez’ representation that a
copy of memorandum was sent. Moreover, since it was undisputed that respondent eventually participated in the
appeal proceedings by filing not only one, but two MRs, thereby negating any supposed denial of due process on
her part.
-end of midterms.
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