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SAN MGIUEL VS.

NLRC
Petitioner San Miguel Corporation (SMC) sponsored an Innovation Program which
grant cash rewards to all SMC employees who submit to the corporation ideas and
suggestions found to beneficial to the corporation.
Private Respondent Rustico Vega, who is a mechanic in the Bottling Department of the
SMC submitted an innovation proposal which supposed to eliminate certain defects in
the quality and taste of the product San Miguel Beer Grande.
Petitioner Corporation did not accept the said proposal and refused Mr. Vegas
subsequent demands for cash award under the innovation program. Hence, Vega filed
a complaint with the then Ministry of Labor and Employment in Cebu. He argued that
his proposal had been accepted by the methods analyst and was implemented by the
SMC and it finally solved the problem of the Corporation in the production of Beer
Grande.
Petitioner denied of having approved Vegas proposal. It stated that said proposal was
turned down for lack of originality and the same, even if implemented, could not
achieve the desire result. Further, petitioner Corporation alleged that the Labor Arbiter
had no jurisdiction.
The Labor Arbiter dismissed the complaint for lack of jurisdiction because the claim
of Vega is not a necessary incident of his employment and does not fall under Article
217 of the Labor Code. However, in a gesture of compassion and to show the
governments concern for the working man, the Labor Arbiter ordered petitioner to pay
Vega P2,000 as financial assistance. Both parties assailed said decision of the Labor
Arbiter. The NLRC set aside the decision of the Labor Arbiter and ordered SMC to pay
complainant the amount of P60,000
Issue: Whether the Labor Arbiter and the Commission has jurisdiction over the
money claim filed by private respondent
HELD: NO
The Labor Arbiter and the Commission has no jurisdiction over the money claim of
Vega.
The court ruled that the money claim of private respondent Vega arose out of or in
connection with his employment with petitioner. However, it is not enough to bring
Vegas money claim within the original and exclusive jurisdiction of Labor Arbiters.
In the CAB, the undertaking of petitioner SMC to grant cash awards to employees
could ripen into an enforceable contractual obligation on the part of petitioner SMC
under certain circumstances. Hence, the issue whether an enforceable contract had
arisen between SMC and Vega, and whether it has been breached, are legal questions
that labor legislations cannot resolved because its recourse is the law on contracts.
Where the claim 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 NLRC.
WHEREFORE, PETITION IS GRANTED

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