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Nitto Enterprises v. NLRC & Roberto Capili / GR No. 114337 / 9.29.

/ Apprenticeship and Learnership
F: Capili (PR) is an employee of Nitto Enterprises. Capili, an apprentice
machinist accidentally injured the leg of the office secretary, on the same
day Capili also managed to injure himself on while working, he was
hospitalized and P incurred 1K-hospital bill. The day after, PR was asked to
resign, subject to payment of his salary and further medical requirement. PR
signed a quitclaim. Days later PRs family sued for illegal dismissal and
payment of monetary benefits. LA favored P. LA said PR acted w/ gross
negligence and that he does not have the proper attitude in such
employment. NLRC reversed. P argues that since PR is only an apprentice
and that he was signed a apprenticeship agreement. Hence this petition.
I: WON the NLRC committed grave abuse of discretion.
R: Petitioners argument is erroneous.
In the case at bench, the apprenticeship agreement between petitioner and
private respondent was executed on May 28, 1990 allegedly employing the
latter as an apprentice in the trade of "core maker/molder." On the same
date, an apprenticeship program was prepared by petitioner and submitted
to the Department of Labor and Employment. However, the apprenticeship
Agreement was filed only on June 7, 1990. Notwithstanding the absence of
approval by the Department of Labor and Employment, the apprenticeship
agreement was enforced the day it was signed. Based on the evidence
before us, petitioner did not comply with the requirements of the law. Article
57 of the Labor Code provides that the State aims to "establish a national
apprenticeship program through the participation of employers, workers and
apprenticeship standards for the protection of apprentices." To translate
such objectives into existence, prior approval of the DOLE to any
apprenticeship program has to be secured as a condition sine qua
non before any such apprenticeship agreement can be fully
enforced. The role of the DOLE in apprenticeship programs and
agreements cannot be debased.
Also, the twin requirements of notice and hearing constitute the essential
elements of due process.

And since the apprenticeship is invalid, PR is considered as a Regular


LVN Pictures v. Philippine Musicians Guild & CIR / GR L1258212598 / 1.28.61 / Employer-Employee Relationship - Importance /
Concepcion, J P:
F: LVN and Sampaguita (P) seeks to de-certify CIRs (PR) certification that
PFW as the sole and exclusive bargaining agency of all musicians working
with P. P also maintains that the certification cannot be granted since there
is no Employee-Employer relationship, PR argues otherwise.
I: (1) WON the musicians working for P are its employees; (2) WON
there could be any legal relationship between the P and the
R: Affirmed.
The musical directors in the instant case have no control over the musicians
involved in the present case. Said directors control neither the music to be
played, nor the musicians playing it. The film companies summon the
musicians to work, through the musical directors. The film companies,
through the musical directors, provide the transportation to and from the
studio. The film companies furnish meal at dinner time. The motion picture
director who is an employee of the company not the musical director
supervises the recording of the musicians and tells them what to do in every
detail, and solely directs the performance of the musicians before the
camera. Held: An employer-employee relationship exists between
the musicians and the film companies. The relationship 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. (Alabama Highway Express Co. vs.
Local, 612, 108 S. 2d 350.)
212 E: "Employer" includes any person acting in the interest of an employer,
directly or indirectly. The term shall not include any labor organization or
any of its officers or agents except when acting as employer.

212 F: "Employee" includes any person in the employ of an employer. The

term shall not be limited to the employees of a particular employer, unless
the Code so explicitly states. It shall include any individual whose work has
ceased as a result of or in connection with any current labor dispute or
because of any unfair labor practice if he has not obtained any other
substantially equivalent and regular employment.
Employer-employee relationship is an agreement between parties to render
service in exchange for compensation. [Compania Maritima v. Ernesta
Cabagnot Vda. de Hio, G.R. No. L-17367-69, February 28, 1963]. However,
these contracts are impressed with public interest that they must yield to
the common good. [Article 1700, Civil Code]. Hence, the presence or
absence of employer-employee relationship is a question of law. [Insular Life
Assurance Co., Ltd. v. NLRC, G.R. No. 119930, March 12, 1998; Tabas v.
California Manufacturing, G.R. No. 80680, January 26, 1989; SSS v. CA, G.R.
No. 100388, December 14, 2000].
Employer Any person, natural or juridical, domestic or foreign, who
carries on in the Philippines any trade, business, industry, undertaking or
activity of any kind and uses the services of another person who is under his
order as regards the employment [Section 8(c), R.A. No. 8282].
Employee Any person in the employ of an employer. The term shall not be
limited to the employees of a particular employer, unless the Labor Code so
explicitly states. It shall include any individual whose work has ceased as a
result of or in connection with any current labor dispute or because of any
unfair labor practice if he has not obtained any other substantially
equivalent and regular employment. [Art 212 (f), Labor Code].
A better definition is provided by Azucena: a natural person who is hired,
directly or indirectly, by a natural or juridical person to perform activities
related to the business of the hirer who, directly or through an agent,
supervises or controls the work performance and pays the salary or wage of
the hiree. [Cesario Azucena, Jr., Everyones Labor Code, p. 56 (2012)].

Rosario Brothers Inc. v. Ople & NLRC, etc. / GR No. L-53590 /

7.31.84 / Employer-Employee Relationships Test to Determine /
Relova, J p:
F: P argues that there exists no EER between them and PR, it is Ps
submission, because of the series of memorandas issued by them from
1973-77, which reveals that P had no control and/or supervision over the
work of the PRs. PR are workers in the clothing business of P, where they are
working under a Piece-Work basis; SSS registered through P; members of
the UNION acknowledged by P. PR then claimed that P violated PD 851 and
525 (13th month pay & Emergency Living Allowance), LA favored P and
declared that there is no EER. NLRC affirmed, Minister of Labor ruled
otherwise. Hence this.
I: WON there is EER.
R: Affirmed. As held in Mafinco Trading Corporation vs. Ople, 70 SCRA 139,
the existence of employer-employee relationship is determined by the
following elements, namely: (1) the selection and engagement of the
employee (done by PR); (2) the payment of wages (Weekly wages
on a piece-work basis [Art 97(F) Labor Code; (3) the power of
dismissal (as in the memorandas issued by PR); and (4) the power
to control employees' conduct (Operation Conduct) although the
latter is the most important element. On the other hand, an
independent contractor is one who exercises independent employment and
contracts to do a piece of work according to his own methods and without
being subjected to control of his employer except as to the result of his

Manila Golf v. IAC & Llamar / GR No. 64948 / 9.27.94 / EmployerEmployee Relationships Test to Determine / Narvasa, C.J p:
F: Caddies of P, are demanding that they be included in the coverage of the
Social Security System through the SSC, arguing that they are employees of
P. P on the other hand, they have no direct control over PR. SSC Dismissed
the Petition. IAC ruled for P, hence this petition.
I: WON there is EER.
R: As long as it is, the list made in the appealed decision detailing the
various matters of conduct, dress, language, etc. covered by the petitioner's
regulations, does not, in the mind of the Court, so circumscribe the actions
or judgment of the caddies concerned as to leave them little or no freedom
of choice whatsoever in the manner of carrying out their services. In the
very nature of things, caddies must submit to some supervision of their
conduct while enjoying the privilege of pursuing their occupation within the
premises and grounds of whatever club they do their work in. For all that
is made to appear, they work for the club to which they attach
themselves on sufferance but, on the other hand, also without
having to observe any working hours, free to leave anytime they
please, to stay away for as long as they like. It is not pretended
that if found remiss in the observance of said rules, any discipline
may be meted them beyond barring them from the premises which,
it may be supposed, the Club may do in any case even absent any
breach of the rules, and without violating any right to work on their
part. All these considerations clash frontally with the concept of
employment. The IAC would point to the fact that the Club suggests the
rate of fees payable by the players to the caddies as still another indication
of the latter's status as employees. It seems to the Court, however, that
the intendment of such fact is to the contrary, showing that the
Club has not the measure of control over the incidents of the
caddies' work and compensation that an employer would possess.
The Court agrees with petitioner that the group rotation system socalled, is less a measure of employee control than an assurance
that the work is fairly distributed, a caddy who is absent when his
turn number is called simply losing his turn to serve and being
assigned instead the last number for the day.

La Suerte Cigar v. Director of BLR / GR No. L-55674 / 7.25.83 /

Employer-Employee Relationships Test to Determine / Guerrero, J
F: P argues that 14 of the alleged members of the UNION, whose petitioning
for certification to become a recognized labor union in the company, are not
employees of P, but where independent contractors, which is necessary to
meet the 30% consent requirement. Med Arbiter dismissed Ps petition.
Director of BLR reversed, hence this petition.
I: WON the 14 dealers are employees or independent contractors.
R: They are Dealers or Independent Contractors. Accordingly, after
considering the terms and stipulations of the Dealership Contracts which are
clear and leave no doubt upon the intention of the contracting
parties in establishing the relationship between the dealers on one
hand and the company on the other as that of buyer and seller, the
Supreme Court finds that the status thereby created is one of
independent contractorship, pursuant to the first rule in the
interpretation of contracts that the literal meaning of the stipulations shall
control. (Article 1370, New Civil Code)
The Supreme Court rulings in Mafinco Trading Corp. vs. Ople, 70 SCRA 139,
where the Court reiterated the "control test" earlier laid down in Investment
Planning Corp. vs. Social Security System, 21 SCRA 924 and Social Security
System vs. Hon. Court of Appeals and Shrino (Phils.) Inc., 37 SCRA 579 are
authoritative and controlling. In the Shrino case, the Court held that the
common law rule of determining the existence of employer-employee
relationship, principally the "control is test" applies in this jurisdiction.
Where the element of control is absent; where a person who words
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, relationship of employer and employee does not

Tabas v. CMC / GR No. 80680 / 1.26.89 / Employer-Employee

Relationships Test to Determine / Sarmiento, J p:
F: P demands reinstatement and benefits. CMC filed to dismiss, claiming
that there is no EER since Ps are promotional merchandisers pursuant to a
manpower supply agreement with LIVI manpower services, w/c agreement
provided that CMC has no control or supervision whatsoever over Ps. On the
other hand it is also stipulated that cola and holidays will be charged
directly to CMC, whose payroll will be delivered through LIVI at CMC. Ps now
claims that they became regular CMC employees. LA ruled that there is no
EER in light of the manpower supply contract.
I: WON there is an EER.
R: Reversed. The fact that the petitioners have been hired on a "temporary
or seasonal" basis merely is no argument either. As we held in Philippine
Bank of Communications v. NLRC, a temporary or casual employee,
under Article 218 of the Labor Code, becomes regular after service
of one year, unless he has been contracted for a specific project.
And we cannot say that merchandising is a specific project for the
obvious reason that it is an activity related to the day-to-day
operations of California. The records show that the petitioners had been
given an initial six-month contract, renewed for another six months.
Accordingly, under Article 281 of the Code, they had become regular
employees of California and had acquired a secure tenure. Hence, they
cannot be separated without due process of law.
It has been likewise held, based on Article 106 of the Labor Code, that
notwithstanding the absence of a direct employer-employee relationship
between the employer in whose favor work had been contracted out by a
"labor-only" contractor, and the employees, the former has the
responsibility, together with the "labor-only" contractor, for any valid labor
claims, by operation of law. The reason, so we held, is that the "laboronly" contractor is considered "merely an agent of the employer,"
and liability must be shouldered by either one or shared by both.
The nature of one's business is not determined by self-serving
appellations one attaches thereto but by the tests provided by
statute and prevailing case law. The bare fact that Livi maintains a

separate line of business does not extinguish the equal fact that it
has provided California with workers to pursue the latter's own

Insular Life v. NLRC & Basiao / GR No. 84484 / Employer-Employee

Relationships Test to Determine / Narvasa, J p:
F: PR entered into a contract to solicit for insurance applications in 1968
later, on 1972, they entered into an Agency Management Contract (AMC)
P later terminated the AMC, w/c prompted PR to sue, which led to P
terminating also his original contract. Basiao complained for the unclaimed
commissions to the MOL, P argues that MOL has no jurisdiction and that
since PR is an independent contractor. LA found for PR, NLRC affirmed,
hence this.
I: WON PR had become the Companys employee.
R: Reversed. What is germane is Basiao's status under the contract
of July 2, 1968, not the length of his relationship with the Company
to justify employment relationship. Basiao was not an employee
but a commission agent, an independent contractor whose claim
for unpaid commissions should have been litigated in an ordinary
civil action.
The 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 do not create employeremployee relationship. While, the rules that control or fix the
methodology and bind or restrict the party hired to the use of such means
create employer-employee relationship.
Rules and regulations governing the conduct of the business are provided
for in the Insurance Code and enforced by the Insurance Commissioner. It is
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. But 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.

Sonza v. ABS-CBN / GR No. 13051 / 6.10.04 / Employer-Employee

Relationships Test to Determine / Carpio, J p:
F: ABS-CBN entered into an agreement w/ MEL&JAY Management and
Development Corp. (MJMDC) to host a TV program, there will be a monthly
talent fee of 310K for the 1 st year and 317 for the 2nd and 3rd year. Sonza
later wrote to ABS-CBN for the rescission of the agreement in view of PRs
failure to pay him his salaries and other benefits. LA ruled in favor of PR,
which NLRC affirmed and the CA dismissed.
I: WON Sonza is an Employee of ABS-CBN.
R: Petition denied.
Unique skills, talent and celebrity status not possessed by ordinary
employees are indicative of an independent contractor; The power
to bargain talent fees way above the salary scales of ordinary employees
indicates an independent contractual relationship A radio/television
broadcast specialist who works under minimal supervision is an independent
contractor; The KBP code applies to broadcasters, not to employees
of radio and television stations; Not all rules imposed by the hiring
party on the hired party indicate that the latter is an employee of
the former; In the broadcast industry, exclusivity is not necessarily
the same as control; Three parties involved in labor- only
contracting; Talents as Independent Contractors
If SONZA did not possess such unique skills, talent and celebrity status,
ABS-CBN would not have entered into the Agreement with SONZA but would
have hired him through its personnel department just like any other
Applying the control test, SONZA is not an employee but an
independent contractor. 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.

Brotherhood Labor Unity Movement of the Philippines v. Zamora /

GR No. L-48645 / 01.07.87 / Employer-Employee Relationships Test
to Determine / Gutierrez, Jr., J:
F: Ps are cargadores and pahinantes working on for as long as 7 years on
average, on a piece rate basis working to load, unload, or piling of bottles
produced by SMC. 140 organized and affiliated themselves to BLUMP (PR),
they later striked, and SMC refused to bargain w/ them, alleging that they
are not employees, rather they were independent contractors they were
later denied work. Sued for illegal dismissal, SMC moved for dismissal. LA
and NLRC ruled for SMC, hence this.
I: WON there exists an EER.
R: Petition Granted, reinstatement w/ back wages. Payment by piece does
not define the essence of employment relation. In this case, the alleged
independent contractors were paid a lump sum representing only
the salaries the workers were entitled to, arrived at by adding the
salaries of each worker which depend on the volume of work they
had accomplished individually.
The existence of an independent 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"
In this case, none of the above criteria exists. Highly unusual and
suspect is the absence of a written contract to specify the
performance of a specified piece of work, the nature and extent of
the work and the term and duration of the relationship.
Also, for an average of seven (7) years, each of the workers had worked
continuously and exclusively for the company's shipping and warehousing
department. Thus, they were engaged to perform activities necessary or

desirable in the usual business or trade of the respondent, and are therefore
regular employees.

SMC v. NLRC / GR No. 80774 / 5.31.88 / EER Jurisdiction / Feliciano, J

F: Vega (PR) and employee of P, submitted a proposal to render the product
of PR to be a more sustainable product (Beer). P dismissed his proposal and
denied him of the cash award that is mandatory to any employee who can
deliver such advancement. PR sued, P in MOLE, claiming that P is using his
proposal and is claiming the cash award. P on the other hand claimed that
PRs submission was turned down because it lacks originality, and claims
that the LA had no jurisdiction, because PR bypassed Ps grievance
machinery. LA turned down PR, NLRC ruled otherwise, hence this.
I: WON the LA and NLRC had Jurisdiction.
R: Set Aside. The important principle that runs through these three (3) cases
is that where the claim to the principal relief sought is to be resolved not by
reference to the Labor Code or other labor relations statute or a collective
bargaining agreement but by the general civil law, the jurisdiction over the
dispute belongs to the regular courts of justice and not to the Labor Arbiter
and the NLRC. In such situations, resolution of the dispute requires
expertise, not in labor management relations nor in wage
structures and other terms and conditions of employment, but
rather in the application of the general civil law. Clearly, such
claims fall outside the area of competence or expertise ordinarily
ascribed to Labor Arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies
While paragraph 3 above refers to "all money claims of workers," it is not
necessary to suppose that the entire universe of money claims that might
be asserted by workers against their employers has been absorbed into the
original and exclusive jurisdiction of Labor Arbiters. It is evident that
there is a unifying element which runs through paragraphs 1 to 5 of
Art. 217 and that is, that they all refer to cases or disputes arising
out of or in connection with an employer-employee relationship.
This is, in other words, a situation where the rule of noscitur a sociis may be
usefully invoked in clarifying the scope of paragraph 3, and any other
paragraph of Article 217 of the Labor Code, as amended.

Thus, whether or not an enforceable contract, albeit implied and

innominate, had arisen between petitioner Corporation and private
respondent Vega in the circumstances of this case, and if so, whether or not
it had been breached, are preeminently legal questions, questions not
to be resolved by referring to labor legislation and having nothing
to do with wages or other terms and conditions of employment, but
rather having recourse to our law on contracts.
PEPSI Cola v. Gal-lang, et. al / GR No. 89621 / 9.24.91 / EER
Jurisdiction / Cruz, J p:
F: PRs were employees of the petitioner who were suspected of irregular
disposition of empty Pepsi Cola bottles, they were criminally charged which
was dismissed, in the course they were terminated from employment. PRs
lodged a complaint with NLRC Tacloban, they also sued for malicious
criminal prosecution in RTC Tacloban. P claimed that since there is now a
case with the LA, civil suit should be dismissed. Dismissed, but was
reconsidered by PR judge, hence this.
I: WON RTC Leyte had jurisdiction.
R: Dismissed. It must be stressed that not every controversy involving
workers and their employers can be resolved only by the labor arbiters.
This will be so only if there is a "reasonable causal connection"
between the claim asserted and employee-employer relations to
put the case under the provisions of Article 217. Absent such a link,
the complaint will be cognizable by the regular courts of justice in
the exercise of their civil and criminal jurisdiction.
The case now before the Court involves a complaint for damages for
malicious prosecution which was filed with the Regional Trial Court of Leyte
by the employees of the defendant company. It does not appear that there
is a "reasonable causal connection" between the complaint and the relations
of the parties as employer and employees. 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 employee" 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.

Medina & Ong v. Judge Bartolome, Aboitiz and Pepsi Cola / GR No.
L-59825 / 9.11.82 / EER Jurisdiction / Abad Santos, J p:
F: Ps former employees of PRs company, alleging that PR Aboitiz dismissed
and publicly humiliated Ps w/o provocation. Ps sued. PR argues that CFI
Makati had no jurisdiction, w/c was denied, pending litigation the Labor
Code was amended, PR now re-raised their jurisdiction contention basing
from Art. 217(b), PR judge granted. Hence this petition.
I: WON the Labor Code has any relevance to the relief sought.
R: Granted. It is obvious from the complaint that the plaintiffs have not
alleged any unfair labor practice. Theirs is a simple action for damages
for tortious acts allegedly committed by the defendants. Such
being the case, the governing statute is the Civil Code and not the
Labor Code. It results that the orders under review are based on a wrong
Where plaintiffs' complaint for damages arising from the alleged
disgraceful termination of employment does not allege any unfair
labor practice, theirs is a simple action for damages for tortious
acts allegedly committed by the defendants.

PNB v. Cabansag / GR 157010 / 6.21.05 / EER Jurisdiction /

Panganiban, J p:
F: Cabansag (PR) was hired by PNB as a Branch Credit Officer in Singapore,
in a probationary status for 3 months, pending regularization. 4 months into
job, performing well with mentions, PR was advised by co-employees that
the Branch manager is asking him to resign, because of retrenchment, and
that they need a chinese for his position, PR did not resign. PR was
eventually terminated. PR sued in Manila, LA ruled in favor of PR, w/c NLRC
affirmed, so did CA.
I: WON NLRC Manila had jurisdiction, and is it most convenient.
R: Affirmed. The jurisdiction of labor arbiters and the NLRC is
specified in Article 217 of the Labor Code as follows: "ART. 217.
Jurisdiction of Labor Arbiters and the Commission. . . . "SECTION
10. Money Claims. . . . Based on the foregoing provisions, 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).
That permit (SG Laws), however, does not automatically mean that the noncitizen 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.
Noteworthy is the fact that respondent likewise applied for and secured an
Overseas Employment Certificate from the POEA through the Philippine
Embassy in Singapore. The Certificate declaring her a bona fide contract
worker for Singapore. Under Philippine law, this document authorized her
working status in a foreign country and entitled her to all benefits and
processes under our statutes, covered by Philippine labor laws and
policies upon certification by the POEA. Hence, petitioner cannot
escape the application of Philippine laws or the jurisdiction of the
NLRC and the labor arbiter.
The appellate court was correct in holding that respondent was already a
regular employee at the time of her dismissal, because her three-month

probationary period of employment had already ended. This ruling is in

accordance with Article 281 of the Labor Code: "An employee who is
allowed to work after a probationary period shall be considered a regular
employee." As a regular employee, respondent was entitled to all rights,
benefits and privileges provided under our labor laws.

Urbanes v. Secretary of DOLE & SSS / GR No. 122791 / 2.19.03 / EER

Jurisdiction / Carpio Morales, J p:
F: Petitioner, provides security services to SSS. During the effectivity of the
agreement, petitioner requested the SSS for upward adjustment of their
contract rate in view of Wage Order No. NCR-03. For failure to heed the
request, petitioner pulled out his agency's services from the premises of SSS
and filed a complaint seeking the implementation of Wage Order No. NCR-03
to the DOLE. Regional LA ruled in favor of P, which was later overturned by
the Secretary of DOLE, hence this.
I: WON DOLE has jurisdiction.
F: The relief sought here has to do with the enforcement of the contract
between petitioner and the SSS which was deemed amended by virtue of
Wage Order No. NCR-03. The controversy subject of the case at bar is
thus a civil dispute, the proper forum for the resolution of which is
the civil courts. At any rate, the complaint must be dismissed for
lack of cause of action. The liability of the SSS to reimburse petitioner
arises only if and when petitioner pays his employee-security guards "the
increases" mandated by Wage Order No. NCR-03. The records do not show
that petitioner has paid the mandated increases to the security guards. The
security guards in fact have filed a complaint with the NLRC against
petitioner relative to, among other things, underpayment of wages.

Yusen Air & Sea Services Phils, Inc. v. Villamor / GR No. 154060 /
8.16.05 / EER Jurisdiction / Garcia, J p:
F: PR is employed by P as a branch manager; w/c was later reclassified as a
Division Manager, w/c he held until he resigned in 2.1.02. PR then worked
for another company in the same line of business. P Sued, citing the
undertaking which PR agreed with P in lieu of his employment. On the other
hand P apparently sued through the NLRC P for illegal dismissal, PR also did
not answer the civil suit, instead he submitted a motion to dismiss, and
arguing that said court had no jurisdiction. RTC dismissed Ps complaint.
Hence this recourse.
I: WON RTC had the proper jurisdiction.
R: Remanded for Trial. Actually, the present case is not one of first
impression. In a kindred case, Dai-Chi Electronics Manufacturing vs.
Villarama, with a substantially similar factual backdrop, we held that an
action for breach of contractual obligation is intrinsically a civil dispute.
Petitioner does not ask for any relief under the Labor Code of the
Philippines. It seeks to recover damages agreed upon in the
contract as redress for private respondent's breach of his
contractual obligation to its "damage and prejudice." Such cause of
action is within the realm of Civil Law, and jurisdiction over the
controversy belongs to the regular courts. The cause of action is
based on a quasi-delict or tort, which has no reasonable causal connection
with any of the claims provided for in Article 217, jurisdiction over the action
is with the regular courts.
The Court, therefore, believes and so holds that the "money claims of
workers" referred to in paragraph 3 of Article 217 embraces money claims
which arise out of or in connection with the employer-employee relationship,
or some aspect or incident of such relationship. Put a little differently, that
money claims of workers which now fall within the original and exclusive
jurisdiction of Labor Arbiters are those money claims which have some
reasonable causal connection with the employer-employee relationship.
It is basic that jurisdiction over the subject matter is determined upon the
allegations made in the complaint, irrespective of whether or not the
plaintiff is entitled to recover upon the claim asserted therein, which is a

matter resolved only after and as a result of a trial. Neither can jurisdiction
of a court be made to depend upon the defenses made by a defendant in
his answer or motion to dismiss. If such were the rule, the question of
jurisdiction would depend almost entirely upon the defendant.