Escolar Documentos
Profissional Documentos
Cultura Documentos
on certiorari under Rule 45 of the Rules of Court. G.R. No. 148132 assails
SMART COMMUNICATIONS, INC., G.R. No. 148132 the February 28, 2000 Decision[1] and the May 7, 2001 Resolution[2] of the Court of
Petitioner, Appeals (CA) in CA-G.R. SP. No. 53831. G.R. Nos. 151079 and 151372 question
the June 11, 2001 Decision[3] and the December 18, 2001Resolution[4] in CA-G.R. SP.
- versus - No. 57065.
Astorga moved to dismiss the complaint on grounds of (i) lack of 3. Jointly and severally pay moral damages in the amount
jurisdiction; (ii) failure to state a cause of action; (iii) litis pendentia; and (iv) forum- of P500,000.00 x x x and exemplary damages in the amount
shopping. Astorga posited that the regular courts have no jurisdiction over the of P300,000.00. x x x
complaint because the subject thereof pertains to a benefit arising from an
employment contract; hence, jurisdiction over the same is vested in the labor tribunal 4. Jointly and severally pay 10% of the amount due as
and not in regular courts.[13] attorneys fees.
Pending resolution of Astorgas motion to dismiss the replevin case, the SO ORDERED.[15]
Labor Arbiter rendered a Decision[14] dated August 20, 1998, declaring Astorgas
dismissal from employment illegal. While recognizing SMARTs right to abolish any
of its departments, the Labor Arbiter held that such right should be exercised in good Subsequently, on March 29, 1999, the RTC issued an Order[16] denying
faith and for causes beyond its control. The Arbiter found the abolition of CSMG Astorgas motion to dismiss the replevin case. In so ruling, the RTC ratiocinated that:
done neither in good faith nor for causes beyond the control of SMART, but a ploy to
terminate Astorgas employment. The Arbiter also ruled that contracting out the Assessing the [submission] of the parties, the Court finds
functions performed by Astorga to an in-house agency like SNMI was illegal, citing no merit in the motion to dismiss.
Section 7(e), Rule VIII-A of the Rules Implementing the Labor Code.
Accordingly, the Labor Arbiter ordered: As correctly pointed out, this case is to enforce a right of
possession over a company car assigned to the defendant under a
WHEREFORE, judgment is hereby rendered declaring car plan privilege arrangement. The car is registered in the name of
the dismissal of [Astorga] to be illegal and unjust. [SMART the plaintiff.Recovery thereof via replevin suit is allowed by Rule
and Santiago] are hereby ordered to: 60 of the 1997 Rules of Civil Procedure, which is undoubtedly
within the jurisdiction of the Regional Trial Court.
1. Reinstate [Astorga] to [her] former position or to a
substantially equivalent position, without loss of seniority rights In the Complaint, plaintiff claims to be the owner of the
and other privileges, with full backwages, inclusive of allowances company car and despite demand, defendant refused to return said
and other benefits from the time of [her] dismissal to the date of car. This is clearly sufficient statement of plaintiffs cause of action.
reinstatement, which computed as of this date, are as follows:
Neither is there forum shopping. The element of litis
(a) Astorga penden[t]ia does not appear to exist because the judgment in the
labor dispute will not constitute res judicata to bar the filing of this
case.
Astorga then went to the CA via certiorari. On June 11, 2001, the CA
WHEREFORE, the Motion to Dismiss is hereby denied rendered a Decision[24] affirming with modification the resolutions of the NLRC. In
for lack of merit. gist, the CA agreed with the NLRC that the reorganization undertaken by SMART
resulting in the abolition of CSMG was a legitimate exercise of management
SO ORDERED.[17] prerogative. It rejected Astorgas posturing that her non-absorption into SNMI was
tainted with bad faith. However, the CA found that SMART failed to comply with
the mandatory one-month notice prior to the intended termination. Accordingly, the
Astorga filed a motion for reconsideration, but the RTC denied it on June 18, 1999. CA imposed a penalty equivalent to Astorgas one-month salary for this non-
[18]
compliance. The CA also set aside the NLRCs order for the return of the company
vehicle holding that this issue is not essentially a labor concern, but is civil in nature,
Astorga elevated the denial of her motion via certiorari to the CA, which, in and thus, within the competence of the regular court to decide. It added that the
its February 28, 2000 Decision,[19] reversed the RTC ruling. Granting the petition matter had not been fully ventilated before the NLRC, but in the regular court.
and, consequently, dismissing the replevin case, the CA held that the case is
intertwined with Astorgas complaint for illegal dismissal; thus, it is the labor tribunal Astorga filed a motion for reconsideration, while SMART sought partial
that has rightful jurisdiction over the complaint. SMARTs motion for reconsideration reconsideration, of the Decision. On December 18, 2001, the CA resolved the
having been denied,[20] it elevated the case to this Court, now docketed as G.R. No. motions, viz.:
148132.
WHEREFORE, [Astorgas] motion for reconsideration is hereby
Meanwhile, SMART also appealed the unfavorable ruling of the Labor PARTIALLY GRANTED. [Smart] is hereby ordered to pay
Arbiter in the illegal dismissal case to the National Labor Relations Commission [Astorga] her backwages from 15 February 1998 to 06 November
(NLRC). In its September 27, 1999Decision,[21] the NLRC sustained Astorgas 1998. [Smarts] motion for reconsideration is outrightly DENIED.
dismissal. Reversing the Labor Arbiter, the NLRC declared the abolition of CSMG
and the creation of SNMI to do the sales and marketing services for SMART a valid SO ORDERED.[25]
organizational action. It overruled the Labor Arbiters ruling that SNMI is an in-house
agency, holding that it lacked legal basis. It also declared that contracting,
subcontracting and streamlining of operations for the purpose of increasing Astorga and SMART came to us with their respective petitions for review
efficiency are allowed under the law. The NLRC further found erroneous the Labor assailing the CA ruling, docketed as G.R Nos. 151079 and 151372. On February 27,
Arbiters disquisition that redundancy to be valid must be impelled by economic 2002, this Court ordered the consolidation of these petitions with G.R. No. 148132.
[26]
reasons, and upheld the redundancy measures undertaken by SMART.
II
Astorga filed a motion for reconsideration, but the NLRC denied it
on December 21, 1999.[23] SMARTS REFUSAL TO REINSTATE ASTORGA DURING THE
PENDENCY OF THE APPEAL AS REQUIRED BY ARTICLE
223 OF THE LABOR CODE, ENTITLES ASTORGA TO HER WHETHER THE HONORABLE COURT OF APPEALS HAS
SALARIES DURING THE PENDENCY OF THE APPEAL. DECIDED A QUESTION OF SUBSTANCE IN A WAY
PROBABLY NOT IN ACCORD WITH LAW OR WITH
III APPLICABLE DECISION[S] OF THE HONORABLE
SUPREME COURT AND HAS SO FAR DEPARTED FROM
THE COURT OF APPEALS WAS CORRECT IN HOLDING THE ACCEPTED AND USUAL COURSE OF JUDICIAL
THAT THE REGIONAL TRIAL COURT HAS NO PROCEEDINGS AS TO CALL FOR AN EXERCISE OF THE
JURISDICTION OVER THE COMPLAINT FOR RECOVERY POWER OF SUPERVISION WHEN IT RULED THAT THE
OF A CAR WHICH ASTORGA ACQUIRED AS PART OF HER REGIONAL TRIAL COURT DOES NOT HAVE JURISDICTION
EMPLOYEE (sic) BENEFIT.[27] OVER THE COMPLAINT FOR REPLEVIN FILED BY SMART
TO RECOVER ITS OWN COMPANY VEHICLE FROM A
FORMER EMPLOYEE WHO WAS LEGALLY DISMISSED.
On the other hand, Smart in its Memoranda raises the following issues:
V
I
WHETHER THE HONORABLE COURT OF APPEALS HAS
WHETHER THE HONORABLE COURT OF APPEALS HAS FAILED TO APPRECIATE THAT THE SUBJECT OF THE
DECIDED A QUESTION OF SUBSTANCE IN A WAY REPLEVIN CASE IS NOT THE ENFORCEMENT OF A CAR
PROBABLY NOT IN ACCORD WITH LAW OR WITH PLAN PRIVILEGE BUT SIMPLY THE RECOVERY OF A
APPLICABLE DECISION OF THE HONORABLE SUPREME COMPANY CAR.
COURT AND HAS SO FAR DEPARTED FROM THE
ACCEPTED AND USUAL COURSE OF JUDICIAL VI
PROCEEDINGS AS TO CALL FOR AN EXERCISE OF THE
POWER OF SUPERVISION WHEN IT RULED THAT SMART WHETHER THE HONORABLE COURT OF APPEALS HAS
DID NOT COMPLY WITH THE NOTICE REQUIREMENTS FAILED TO APPRECIATE THAT ASTORGA CAN NO
PRIOR TO TERMINATING ASTORGA ON THE GROUND OF LONGER BE CONSIDERED AS AN EMPLOYEE OF SMART
REDUNDANCY. UNDER THE LABOR CODE.[29]
II
The Court shall first deal with the propriety of dismissing the replevin case
WHETHER THE NOTICES GIVEN BY SMART TO ASTORGA filed with the RTC of Makati City allegedly for lack of jurisdiction, which is the
AND THE DEPARTMENT OF LABOR AND EMPLOYMENT issue raised in G.R. No. 148132.
ARE SUBSTANTIAL COMPLIANCE WITH THE NOTICE
REQUIREMENTS BEFORE TERMINATION. Replevin is an action whereby the owner or person entitled to repossession
of goods or chattels may recover those goods or chattels from one who has
III wrongfully distrained or taken, or who wrongfully detains such goods or chattels. It
is designed to permit one having right to possession to recover property in specie
WHETHER THE RULE ENUNCIATED IN SERRANO VS. from one who has wrongfully taken or detained the property.[30] The term may refer
NATIONAL LABOR RELATIONS COMMISSION FINDS either to the action itself, for the recovery of personalty, or to the provisional remedy
APPLICATION IN THE CASE AT BAR CONSIDERING THAT traditionally associated with it, by which possession of the property may be obtained
IN THE SERRANO CASE THERE WAS ABSOLUTELY NO by the plaintiff and retained during the pendency of the action.[31]
NOTICE AT ALL.[28]
That the action commenced by SMART against Astorga in the RTC of
IV Makati City was one for replevin hardly admits of doubt.
In reversing the RTC ruling and consequently dismissing the case for lack picket. But the determination of the question of who has the better
of jurisdiction, the CA made the following disquisition, viz.: right to take possession of the Vessel and whether petitioners can
deprive the Charterer, as the legal possessor of the Vessel, of that
[I]t is plain to see that the vehicle was issued to [Astorga] right to possess in addressed to the competence of Civil Courts.
by [Smart] as part of the employment package. We doubt that
[SMART] would extend [to Astorga] the same car plan privilege In thus ruling, this Court is not sanctioning split
were it not for her employment as district sales manager of the jurisdiction but defining avenues of jurisdiction as laid down by
company. Furthermore, there is no civil contract for a loan between pertinent laws.
[Astorga] and [Smart]. Consequently, We find that the car plan
privilege is a benefit arising out of employer-employee
relationship. Thus, the claim for such falls squarely within the The CA, therefore, committed reversible error when it overturned the RTC ruling
original and exclusive jurisdiction of the labor arbiters and the and ordered the dismissal of the replevin case for lack of jurisdiction.
NLRC.[32]
Having resolved that issue, we proceed to rule on the validity of Astorgas
dismissal.
We do not agree. Contrary to the CAs ratiocination, the RTC rightfully
assumed jurisdiction over the suit and acted well within its discretion in denying Astorga was terminated due to redundancy, which is one of the authorized
Astorgas motion to dismiss. SMARTs demand for payment of the market value of the causes for the dismissal of an employee. The nature of redundancy as an authorized
car or, in the alternative, the surrender of the car, is not a labor, but a civil, dispute. It cause for dismissal is explained in the leading case of Wiltshire File Co., Inc. v.
involves the relationship of debtor and creditor rather than employee-employer National Labor Relations Commission,[35] viz:
relations.[33] As such, the dispute falls within the jurisdiction of the regular courts.
x x x redundancy in an employers personnel force necessarily or
In Basaya, Jr. v. Militante,[34] this Court, in upholding the jurisdiction of the even ordinarily refers to duplication of work. That no other person
RTC over the replevin suit, explained: was holding the same position that private respondent held prior to
termination of his services does not show that his position had not
Replevin is a possessory action, the gist of which is the right of become redundant. Indeed, in any well organized business
possession in the plaintiff. The primary relief sought therein is the enterprise, it would be surprising to find duplication of work and
return of the property in specie wrongfully detained by another two (2) or more people doing the work of one person. We believe
person. It is an ordinary statutory proceeding to adjudicate rights to that redundancy, for purposes of the Labor Code, exists where the
the title or possession of personal property. The question of services of an employee are in excess of what is reasonably
whether or not a party has the right of possession over the property demanded by the actual requirements of the enterprise. Succinctly
involved and if so, whether or not the adverse party has wrongfully put, a position is redundant where it is superfluous, and superfluity
taken and detained said property as to require its return to plaintiff, of a position or positions may be the outcome of a number of
is outside the pale of competence of a labor tribunal and beyond factors, such as overhiring of workers, decreased volume of
the field of specialization of Labor Arbiters. business, or dropping of a particular product line or service activity
previously manufactured or undertaken by the enterprise.
xxxx
The labor dispute involved is not intertwined with the The characterization of an employees services as superfluous or no longer necessary
issue in the Replevin Case. The respective issues raised in each and, therefore, properly terminable, is an exercise of business judgment on the part
forum can be resolved independently on the other. In fact in 18 of the employer. The wisdom and soundness of such characterization or decision is
November 1986, the NLRC in the case before it had issued an not subject to discretionary review provided, of course, that a violation of law or
Injunctive Writ enjoining the petitioners from blocking the free arbitrary or malicious action is not shown.[36]
ingress and egress to the Vessel and ordering the petitioners to
disembark and vacate. That aspect of the controversy is properly Astorga claims that the termination of her employment was illegal and
settled under the Labor Code. So also with petitioners right to tainted with bad faith. She asserts that the reorganization was done in order to get rid
of her. But except for her barefaced allegation, no convincing evidence was offered judgment based on relevant criteria and is therefore a legitimate
to prove it. This Court finds it extremely difficult to believe that SMART would exercise of management prerogative.
enter into a joint venture agreement with NTT, form SNMI and abolish CSMG/FSD
simply for the sole purpose of easing out a particular employee, such as
Astorga. Moreover, Astorga never denied that SMART offered her a supervisory Indeed, out of our concern for those lesser circumstanced in life, this Court
position in the Customer Care Department, but she refused the offer because the has inclined towards the worker and upheld his cause in most of his conflicts with his
position carried a lower salary rank and rate. If indeed SMART simply wanted to get employer. This favored treatment is consonant with the social justice policy of the
rid of her, it would not have offered her a position in any department in the Constitution. But while tilting the scales of justice in favor of workers, the
enterprise. fundamental law also guarantees the right of the employer to reasonable returns for
his investment.[38] In this light, we must acknowledge the prerogative of the employer
Astorga also states that the justification advanced by SMART is not true to adopt such measures as will promote greater efficiency, reduce overhead costs and
because there was no compelling economic reason for redundancy. But contrary to enhance prospects of economic gains, albeit always within the framework of existing
her claim, an employer is not precluded from adopting a new policy conducive to a laws. Accordingly, we sustain the reorganization and redundancy program
more economical and effective management even if it is not experiencing economic undertaken by SMART.
reverses. Neither does the law require that the employer should suffer financial
losses before he can terminate the services of the employee on the ground of However, as aptly found by the CA, SMART failed to comply with the
redundancy. [37] mandated one (1) month notice prior to termination. The record is clear that Astorga
received the notice of termination only on March 16, 1998[39] or less than a month
We agree with the CA that the organizational realignment introduced by prior to its effectivity on April 3, 1998. Likewise, the Department of Labor and
SMART, which culminated in the abolition of CSMG/FSD and termination of Employment was notified of the redundancy program only onMarch 6, 1998.[40]
Astorgas employment was an honest effort to make SMARTs sales and marketing
departments more efficient and competitive. As the CA had taken pains to elucidate: Article 283 of the Labor Code clearly provides:
x x x a careful and assiduous review of the records will yield no Art. 283. Closure of establishment and reduction of personnel. The
other conclusion than that the reorganization undertaken by employer may also terminate the employment of any employee due
SMART is for no purpose other than its declared objective as a to the installation of labor saving devices, redundancy,
labor and cost savings device.Indeed, this Court finds no fault in retrenchment to prevent losses or the closing or cessation of
SMARTs decision to outsource the corporate sales market to SNMI operation of the establishment or undertaking unless the closing is
in order to attain greater productivity. [Astorga] belonged to the for the purpose of circumventing the provisions of this Title, by
Sales Marketing Group under the Fixed Services Division serving a written notice on the workers and the Ministry of Labor
(CSMG/FSD), a distinct sales force of SMART in charge of selling and Employment at least one (1) month before the intended date
SMARTs telecommunications services to the corporate thereof x x x.
market. SMART, to ensure it can respond quickly, efficiently and
flexibly to its customers requirement, abolished CSMG/FSD and
shortly thereafter assigned its functions to newly-created SNMI SMARTs assertion that Astorga cannot complain of lack of notice because
Multimedia Incorporated, a joint venture company of SMART and the organizational realignment was made known to all the employees as early as
NTT of Japan, for the reason that CSMG/FSD does not have the February 1998 fails to persuade.Astorgas actual knowledge of the reorganization
necessary technical expertise required for the value added cannot replace the formal and written notice required by the law. In the written
services. By transferring the duties of CSMG/FSD to SNMI, notice, the employees are informed of the specific date of the termination, at least a
SMART has created a more competent and specialized month prior to the effectivity of such termination, to give them sufficient time to find
organization to perform the work required for corporate other suitable employment or to make whatever arrangements are needed to cushion
accounts. It is also relieved SMART of all administrative costs the impact of termination. In this case, notwithstanding Astorgas knowledge of the
management, time and money-needed in maintaining the reorganization, she remained uncertain about the status of her employment until
CSMG/FSD. The determination to outsource the duties of the SMART gave her formal notice of termination. But such notice was received by
CSMG/FSD to SNMI was, to Our mind, a sound business Astorga barely two (2) weeks before the effective date of termination, a period very
much shorter than that required by law.
However, the award of backwages to Astorga by the CA should be deleted
Be that as it may, this procedural infirmity would not render the termination for lack of basis. Backwages is a relief given to an illegally dismissed
of Astorgas employment illegal. The validity of termination can exist independently employee. Thus, before backwages may be granted, there must be a finding of unjust
of the procedural infirmity of the dismissal.[41] In DAP Corporation v. CA,[42] we or illegal dismissal from work.[45] The Labor Arbiter ruled that Astorga was illegally
found the dismissal of the employees therein valid and for authorized cause even if dismissed. But on appeal, the NLRC reversed the Labor Arbiters ruling and
the employer failed to comply with the notice requirement under Article 283 of the categorically declared Astorgas dismissal valid. This ruling was affirmed by the CA
Labor Code. This Court upheld the dismissal, but held the employer liable for non- in its assailed Decision. Since Astorgas dismissal is for an authorized cause, she is
compliance with the procedural requirements. not entitled to backwages. The CAs award of backwages is totally inconsistent with
its finding of valid dismissal.
The CA, therefore, committed no reversible error in sustaining Astorgas
dismissal and at the same time, awarding indemnity for violation of Astorga's WHEREFORE, the petition of SMART docketed as G.R. No. 148132
statutory rights. is GRANTED. The February 28, 2000 Decision and the May 7, 2001 Resolution of
the Court of Appeals in CA-G.R. SP. No. 53831 are SET
However, we find the need to modify, by increasing, the indemnity awarded ASIDE. The Regional Trial Court of Makati City, Branch 57 is DIRECTED to
by the CA to Astorga, as a sanction on SMART for non-compliance with the one- proceed with the trial of Civil Case No. 98-1936 and render its Decision with
month mandatory notice requirement, in light of our ruling in Jaka Food Processing reasonable dispatch.
Corporation v. Pacot,[43] viz.:
On the other hand, the petitions of SMART and Astorga docketed as G.R.
[I]f the dismissal is based on a just cause under Article Nos. 151079 and 151372 are DENIED. The June 11, 2001 Decision and the
282 but the employer failed to comply with the notice requirement, December 18, 2001 Resolution in CA-G.R. SP. No. 57065,
the sanction to be imposed upon him should be tempered because are AFFIRMED with MODIFICATION. Astorga is declared validly
the dismissal process was, in effect, initiated by an act imputable to dismissed. However, SMART is ordered to pay Astorga P50,000.00 as indemnity for
the employee, and (2) if the dismissal is based on an authorized its non-compliance with procedural due process, her separation pay equivalent to one
cause under Article 283 but the employer failed to comply with the (1) month pay, and her salary from February 15, 1998 until the effective date of her
notice requirement, the sanction should bestiffer because the termination on April 3, 1998. The award of backwages is DELETED for lack of
dismissal process was initiated by the employers exercise of his basis.
management prerogative.
As provided in Article 283 of the Labor Code, Astorga is, likewise, entitled
to separation pay equivalent to at least one (1) month salary or to at least one (1)
months pay for every year of service, whichever is higher. The records show that
Astorgas length of service is less than a year. She is, therefore, also entitled to
separation pay equivalent to one (1) month pay.
YNARES-SANTIAGO,
Grandteq is a domestic corporation engaged in the business of selling
Chairperson, welding electrodes, alloy steels, aluminum and copper alloys.[5] Gonzales is the
President/Owner of Grandteq.[6]Grandteq employed Margallo as Sales Engineer
beginning 3 August 1999.[7]
VELASCO, JR.,
- versus -
CHICO-NAZARIO,
Margallo claimed that on an unstated date, she availed herself of the car loan
NACHURA, and program offered to her by Grandteq as a reward for being Salesman of the Year. She
paid the down payment on a brand new Toyota Corolla,[8] amounting to P201,000.00,
PERALTA, JJ. out of her own pocket. The monthly amortization for the car was P10,302.00, of
which P5,302.00 was to be her share and P5,000.00 was to be the share of Grandteq.
EDNA MARGALLO,
Promulgated: On 29 December 2003, Margallo received a letter[9] signed by Gonzales and
Respondent.
Rolando de Leon (De Leon), Vice-President for Administration of Grandteq, which
reads:
July 28, 2009
Mrs. Edna E. Margallo
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
c/o Grandteq Industrial
Steel Products, Inc.
#2 Cooper St., cor. Benitez
DECISION
SFDM, Quezon City
Because of this, you are given a (sic) twenty-four (24) Responding to the foregoing letter, Margallo wrote the following letter-
hours upon receipt of this letter to submit a written reply dated 30 December 2003:
explanation on why you should not be given a
disciplinary action for allegedly
violating/committing: December 30, 2003
Last December 18, 2003, Mr. Steve D. Rivera instructed Grandteq and Gonzales opposed Margallos claims. They maintained that
me to tell to our delivery people to bring the said item to circle Margallo was not entitled to sales commissions because the computation thereof,
freight. Which I did that (sic) I thought it was ok because it was according to company policy, should be based on actual collections within 180 days
inside the company. Sir I was just following orders from Mr. D. from invoice date. All of Margallos credit sales transactions were unpaid,
Rivera who is one of my boss (sic). Sir, what I did is the same outstanding, and past due. Margallo was also not entitled to any sales incentive,
thing that Ive been doing with my other bosses. That i[f] they because said benefit was intended for customers, and not for the sales personnel.
[14]
instructed me to do things I immediately follow.Because I am only Grandteq and Gonzales further insisted that Margallo had no right to the refund of
an employee. Sir never that I work with JVM (sic). her car loan payments under the car loan agreement she executed with Grandteq,
which expressly provided that in the event that Margallo resigned or was terminated
for cause during the effectivity of said agreement, her car loan payments would be
Sir im (sic) sorry if I did wrong by not asking what to forfeited in favor of Grandteq, and Grandteq would regain possession of the car.
do. Which I think an ordinary employee like me would do is to
follow orders from my superiors.
The Labor Arbiter rendered a Decision on 11 July 2005, dismissing all of
Margallos claims, thus:
IM SO SORRY SIR IF I FAIL YOU.
Edna E. Margallo[10]
The Labor Arbiter held that Margallo was not able to prove by substantial
evidence her entitlement to the sales commission:
Margallo then averred that in January 2004, De Leon asked her to just
resign, promising that if she did, she would still be paid her commissions and other
benefits, as well as be reimbursed her car loan payments. Relying on De Leons After a careful review of the records, this Office finds that
promise, Margallo tendered on 13 January 2004, her irrevocable resignation, considering [Margallo] already receives a basic salary plus
effective immediately.[11] allowances, her claim for sales commission is therefore an added
benefit wholly dependent upon her sales performance based on
existing company policy. As such, it is an affirmative allegation or
claim that is not normally included in the regular course of
business and for which law presumes that an employee is generally
not entitled to. Thus, it behooves, upon the employee to prove that
he is entitled to said affirmative allegations and the onus is upon And as regards of (sic) the car loan, the same should be
him to establish his right thereto (see Eternit Employees and governed by the undisputed terms and conditions of the Agreement
Workers Unions vs. De Veyra, 189 SCRA 752 and Nucum vs. between complainant and respondent company (Annex A of
Inciong, 204 SCRA 697). respondents position paper). And page 2 of said Agreement clearly
stipulates that in case of resignation, all payments made by the
personnel shall be forfeited in favor of the company. Thus, the
In the instant case, this Office finds [Margallo] to have failed claim for refund of the car loan should likewise be denied.[18]
to substantially discharge her burden of proving that she is entitled
to the P87,508.00 in sales commissions since other than her bare
allegations, [Margallo] did not show any other proof, including
prior payment of said sales commissions, to justify her claim.
Margallo filed an appeal with the NLRC, docketed as NLRC NCR CA No.
045888-05. Although the NLRC, in its Decision dated 18 October 2006, stated that it
merely modified the Decision dated 11 July 2005 of the Labor Arbiter, it effectively
And, quite noteworthy too is that under the [Grandteq]s reversed the same by granting Margallo her claims for sales commission,
policy, rules and regulations on the grant of sales commissions, the reimbursement of her car loan payments, and attorneys fees. The fallo of the NLRC
computation thereof shall be based on actual collection against all Decision is quoted below:
sales on credit and the validity of the said commission shall be 180
days from invoice dates; otherwise, the salesman shall not be
entitled thereto and forfeits any right to demand payment of the
commission thereon as the sales are considered bad debts as WHEREFORE, the decision appealed from is hereby
uncollectible. Since the records of [Grandteq] showed that MODIFIED. [Herein petitioners] Grandteq Industrial Products,
[Margallo]s credit sales remain unpaid and outstanding for over Inc. and/or its President/General Manager, [petitioner] Abelardo
180 days, [Margallo] is therefore not entitled to sales commissions. M. Gonzales, are hereby ordered to refund to the [herein
respondent Margallo] her car loan payments amounting
to P217,815.94 and to pay her the amount of P10,870.79
representing her unpaid sales commissions plus ten percent (10%)
No denial whatsoever of the above-discussed company policy of the total monetary award as attorneys fees.[19]
was made by [Margallo] in her Reply.
Thus, having failed to establish entitlement to said sales
commission, the same is hereby denied.[16]
For a similar reason, the Labor Arbiter denied Margallos In ordering that Grandteq and Gonzales reimburse the car loan payments
claim for payment of cash incentive: made by Margallo, the NLRC reasoned:
As regards to cash incentives, once again this Office finds It is unlikely for an employee who has invested his time and
that the same is also an affirmative allegation and the burden of industry in a particular job to simply give it up after being accused
proving entitlement thereto rests upon the employee. And having of violating company rules and regulations. It is more likely that he
failed to even mention how much of the alleged cash incentive she did so upon the expectation that she would derive a certain benefit
is entitled to in Annexes A and 2-a of her position paper, the same from it. Thus, the claim that the [herein respondent Margalllo]
is hereby denied.[17] resigned because she was promised that she would be paid her
money claims if she did, is more credible than the contention that
Finally, the Labor Arbiter found that Margallo had no right to she did so without any prodding from the [herein petitioners
the reimbursement of her car loan payments under her car loan Grandteq and Gonzales].
agreement with Grandteq:
It would therefore appear that the provision, in the agreement Grandteq and Gonzales filed a Motion for Reconsideration,
[22]
(records, pp. 32-340) executed by the parties, that in case of while Margallo also filed an Omnibus Motion for Partial
resignation of the PERSONNEL from the COMPANY, all Reconsideration and Issuance of Subpoena.[23] The NLRC denied
payments made by the PERSONNEL shall be forfeited in favor of the Motions for Reconsideration of all parties in a Resolution
the COMPANY has been superseded by the above-mentioned dated 21 May 2007, but modified the NLRC Decision dated 18
subsequent agreement between the parties. October 2006 by slightly reducing the amount of car loan
payments to be refunded to Margallo:
As for Margallos other claims, the NLRC affirmed her entitlement to the
unpaid sales commission, but not to the cash incentive: Grandteq and Gonzales elevated the case to the Court of Appeals by way of a
Petition for Certiorari, under Rule 65 of the Rules of Court, which was docketed as
CA-G.R. SP No. 100012.
Insofar as the [respondent Margallo]s claim for unpaid sales
commission is concerned, it is noteworthy that in the list (records,
pp. 16-18) of sales she adduced in evidence, the column bearing In its Decision dated 21 January 2008, the Court of Appeals agreed with the
the heading collected indicates that, as of January 2004, the total NLRC, dismissing the therein Petition of Grandteq and Gonzales in this wise:
collections from her sales amount to only P217,815.94. Since it is
undisputed hat her sales commission are equivalent to 5% of her
collections, she may recover unpaid sales commissions amounting
WHEREFORE, premises considered, the Petition is
to P10,890.79. Finally, since there is no showing that the
DENIED for lack of merit. Costs against petitioners.[25]
[respondent Margallo]s claim for cash incentive is based on a
particular contract or company practice, it was correctly dismissed
for lack of merit.[21]
Like the NLRC, the Court of Appeals found that Margallo had a right to be Assiduous, Grandteq and Gonzales are now before this
reimbursed her car loan payments, and the terms of the car loan agreement between Court via the Petition at bar.
Margallo and Grandteq should not be applied for being highly prejudicial to the
employees interest:
Grandteq and Gonzales assert that the Court of Appeals erred in declaring
the car loan agreement between Grandteq and Margallo, particularly the provision
Truly, the contracting parties may establish such stipulations, therein on the forfeiture of car loan payments in favor of Grandteq should Margallo
clauses, terms and conditions as they want, and their agreement resign from the company, as null and void.[28]
would have the force of law between them. However, those terms
and conditions agreed upon must not be contrary to law, morals,
customs, public policy or public order. Precisely, the law overrides The Court, however, is in agreement with the Court of Appeals and the NLRC.
such conditions which are prejudicial to the interest of the
worker. The law affords protection to an employee, and it will not Generally speaking, contracts are respected as the law between the contracting
countenance any attempt to subvert its spirit and intent. The sheer parties. The contracting parties may establish such stipulations, clauses, terms and
inequality that characterizes employer-employee relations, where conditions as they may deem convenient, provided they are not contrary to law,
the scales generally tip against the employee, often scarcely morals, good customs, public order or public policy.[29]
provides him real and better options. Moreover, in controversies
between a laborer and his master, doubts reasonably arising from
the evidence, or in the interpretation of agreements and writing
The questionable provision in the car loan agreement between Grandteq and
should be resolved in the formers favor.[26]
Margallo provides: In case of resignation, of the personnel from the company, all
The Court of Appeals likewise affirmed the order of the payments made by the personnel shall be forfeited in favor of the company.
[30]
NLRC that Grandteq and Gonzales pay Margallo her sales Connected thereto is the provision in the same car loan agreement, which reads:
commission, placing the burden upon the employer to prove that
the employees money claims had been paid:
1. The COMPANY shall have the right to regain the
With respect to the unpaid sales commissions
possession of the car before the expiration of the term of the loan
of P10,870.79 to be paid by petitioners in favor of private
in the event of any of the following:
respondent, it is incumbent upon petitioner employer to prove that
said money claim has been paid. This is in tune with the general
a. The PERSONNEL resigns from the COMPANY during
precept that: one who pleads payment has the burden of proving it,
the effectivity of this agreement.[31]
and even where the employees must allege nonpayment, the
general rule is that the burden rests on the defendant to prove
(payment), rather than on the plaintiff to prove non-payment. The
reason for the rule is that the pertinent personnel files, payrolls,
records, remittances and other similar documents which will show Said provisions plainly are contrary to the fundamental principles of justice
that overtime, differentials, service incentive leave and other and fairness. It must be remembered that Margallo herself paid for the down payment
claims of workers have been paid are not in the possession of the and her share in the monthly amortization of the car. However, she did not get to
worker but in the custody and absolute control of the employer. In leave with the car when she resigned from Grandteq. In effect, Margallo parted with
the present case, petitioners [Grandteq and Gonzales] failed to her hard-earned money for nothing, being left, as she is, with an empty bag. The
discharge the burden of proving that the amount of P10,870.79 inequitableness in the conduct of Grandteq and Gonzales is heightened by the fact
representing [herein respondent Margallo]s sales commissions has that after they regained possession of the car, they resold the same to another
already been paid to the latter. Thus, the NLRC (Second Division) employee under a similar contract bearing the same terms and conditions signed by
did not commit grave abuse of discretion in awarding said money Margallo.
claim in favor of [respondent Margallo].[27]
The principle that no person may unjustly enrich oneself at the expense of Margallo would, indeed, be to sanction unjust enrichment in favor of the first two
another (Nemo cum alteris detrimento locupletari potest) is embodied in Article 22 and cause unjust poverty to the latter.[34]
of the New Civil Code, to wit:
As can be gleaned from the foregoing, there is unjust enrichment when (1) a
person is unjustly benefited, and (2) such benefit is derived at the expense of or with The Court further finds no error in the grant by the Court of Appeals and the
damages to another. The main objective of the principle of unjust enrichment is to NLRC of Margallos claim for sales commission.
prevent one from enriching oneself at the expense of another. It is commonly In cases involving money claims of employees, the employer has the burden
accepted that this doctrine simply means that a person shall not be allowed to profit of proving that the employees did receive their wages and benefits and that the same
or enrich himself inequitably at anothers expense. One condition for invoking this were paid in accordance with law.[36]
principle is that the aggrieved party has no other action based on a contract, quasi-
contract, crime, quasi-delict, or any other provision of law.
It is settled that once the employee has set out with particularity in his
complaint, position paper, affidavits and other documents the labor standard benefits
This is not a case of equity overruling or supplanting a positive provision of he is entitled to, and which the employer allegedly failed to pay him, it becomes the
law or judicial rule. Rather, equity is exercised in this case as the complement of employers burden to prove that it has paid these money claims. One who pleads
legal jurisdiction [that] seeks to reach and to complete justice where courts of law, payment has the burden of proving it; and even where the employees must allege
through the inflexibility of their rules and want of power to adapt their judgments to nonpayment, the general rule is that the burden rests on the defendant to prove
the special circumstances of cases, are incompetent to do so.[33] payment, rather than on the plaintiff to prove nonpayment.[37]
The principle against unjust enrichment obliges Grandteq and Gonzales to Under the terms and conditions of Margallos employment with Grandteq, it
refund to Margallo the car loan payments she had made, since she has not actually is provided that she will do field sales with commission on sales made after a months
acquired the car. To relieve Grandteq and Gonzales of their obligation to reimburse training.[38] On this basis, Margallos entitlement to sales commission is unrebutted.
Hence, it was actually the Labor Arbiter who erred in denying Margallos claim
for sales commission for failure to state the particulars to substantiate the
same. Grandteq and Gonzales have the burden of proof to show, by substantial
evidence, their claim that Margallo was not entitled to sales commissions because the
sales made by the latter remained outstanding and unpaid, rendering these sales as
bad debts and thus nullifying Margallos right to this monetary benefit. Grandteq and
Gonzales could have presented pertinent company records to prove this claim. It is a
rule that failure of employers to submit the necessary documents that are in their
possession as employers gives rise to the presumption that the presentation thereof is
prejudicial to its cause.[39]
On February 9, 2004, petitioner filed a motion for reconsideration thereto, which was We are not convinced.
likewise denied in an Order issued on even date.
The jurisdiction of the LA and the NLRC is outlined in Article 217 of the Labor
Expectedly, petitioner then filed a Petition for Certiorariwith the CA on the ground Code, as amended by Section 9 of Republic Act (R.A.) No. 6715, to wit:
that the RTC committed grave abuse of discretion amounting to lack or excess of
jurisdiction in upholding that it has jurisdiction over the subject matter of the ART. 217. Jurisdiction of Labor Arbiters and the Commission-- (a) Except as
complaint despite the broad and clear terms of Article 217 of the Labor Code, as otherwise provided under this Code the Labor Arbiter shall have original and
amended.26 exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without extension, even in the
After the submission by the parties of their respective Memoranda, the CA rendered absence of stenographic notes, the following cases involving all workers, whether
a Decision27 dated May 30, 2005 dismissing petitioners Petition for lack of merit, agricultural or nonagricultural:
the dispositive portion of which states:
1. Unfair labor practice cases;
WHEREFORE, premises considered, petition for certiorari is hereby
DISMISSEDfor lack of merit. SO ORDERED.28 2. Termination disputes;
From the aforesaid Decision, petitioner filed a Motion for Reconsideration which 3. If accompanied with a claim for reinstatement, those cases that workers
was nevertheless denied for lack of merit in the CAs Resolution 29 dated January 10, may file involvingwages, rates of pay, hours of work and other terms and
2006. Hence, petitioner interposed the instant petition upon the solitary ground that conditions of employment;
"THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION OF
SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND WITH 4. Claims for actual, moral, exemplary and other forms of damages arising
APPLICABLE DECISIONS OF THE HONORABLE SUPREME from employer-employee relations;
COURT."30 Simply, the issue presented before us is whether or not the RTC has
jurisdiction over the subject matter of respondents complaint praying for moral 5. Cases arising from any violation of Article 264 of this Code including
damages,exemplary damages, compensatory damages, anchored on petitioners questions involving the legality of strikes and lockouts; and
alleged gross negligence in failing to provide a safe and healthy working
environment for respondent. 6. Except claims for Employees Compensation, Social Security, Medicare
and maternity benefits, all other claims, arising from employer-employee
The delineation between the jurisdiction of regular courts and labor courts over cases relations, including those of persons in domestic or household
involving workers and their employers has always been a matter of dispute. 31 It is up service,involving an amount exceeding five thousand pesos (P5,000.00)
to the Courts to lay the line after careful scrutiny of the factual milieu of each case. regardless of whether accompanied with a claim for reinstatement.
Here, we find that jurisdiction rests on the regular courts.
x x x.35 Upon the facts and issues involved, jurisdiction over the present controversy must be
held to belong to the civil Courts. While seemingly petitioner's claim for damages
While we have upheld the present trend to refer worker-employer controversies to arises from employer-employee relations, and the latest amendment to Article 217 of
labor courts in light of the aforequoted provision, we have also recognized that not the Labor Code under PD No. 1691 and BP Blg. 130 provides that all other
all claims involving employees can be resolved solely by our labor courts, claimsarising from employer-employee relationship are cognizable by Labor Arbiters
specifically when the law provides otherwise. 36 For this reason, we have formulated [citation omitted], in essence, petitioner's claim for damages is grounded on the
the "reasonable causal connection rule," wherein if there is a reasonable causal "wanton failure and refusal"without just cause of private respondent Cruz to report
connection between the claim asserted and the employer-employee relations, then the for duty despite repeated notices served upon him of the disapproval of his
case is within the jurisdiction of the labor courts; and in the absence thereof, it is the application for leave of absence without pay. This, coupled with the further averment
regular courts that have jurisdiction.37 Such distinction is apt since it cannot be that Cruz "maliciously and with bad faith" violated the terms and conditions of the
presumed that money claims of workers which do not arise out of or in connection conversion training course agreement to the damage of petitioner removes the
with their employer-employee relationship, and which would therefore fall within the present controversy from the coverage of the Labor Code and brings it within the
general jurisdiction of the regular courts of justice, were intended by the legislative purview of Civil Law.
authority to be taken away from the jurisdiction of the courts and lodged with Labor
Arbiters on an exclusive basis.38 Clearly, the complaint was anchored not on the abandonment per seby private
respondent Cruz of his jobas the latter was not required in the Complaint to report
In fact, as early as Medina vs. Hon. Castro-Bartolome, 39 in negating the jurisdiction back to workbut on the manner and consequent effects of such abandonmentof
of the LA, although the parties involved were an employer and two employees, the work translated in terms of the damages which petitioner had to suffer. x x x.42
Court succinctly held that:
Indeed, jurisprudence has evolved the rule that claims for damages under Article
The pivotal question to Our mind iswhether or not the Labor Code has any relevance 217(a)(4) of the Labor Code, to be cognizable by the LA, must have a reasonable
to the reliefs sought by the plaintiffs. For if the Labor Code has no relevance, any causal connection withany of the claims provided for in that article. 43 Only if there is
discussion concerning the statutes amending it and whether or not they have such a connection with the other claims can a claim for damages be considered as
retroactive effect is unnecessary. arising from employer-employee relations.44
It is obvious from the complaint that the plaintiffs have not alleged any unfair labor In the case at bench, we find that such connection is nil.
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 True, the maintenance of a safe and healthy workplace is ordinarily a subject of labor
not the Labor Code. It results that the orders under revieware based on a wrong cases. More, the acts complained of appear to constitute matters involving employee-
premise.40 employer relations since respondent used to be the Civil Engineer of petitioner.
However, it should be stressed that respondents claim for damages is specifically
Similarly, we ruled in the recent case of Portillo v. Rudolf Lietz, Inc. 41 that not all grounded on petitioners gross negligenceto provide a safe, healthy and workable
disputes between an employer and his employees fall within the jurisdiction of the environment for its employees a case of quasi-delict. This is easily ascertained from
labor tribunals suchthat when the claim for damages is grounded on the "wanton a plain and cursory reading of the Complaint,45 which enumerates the acts and/or
failure and refusal" without just cause of an employee to report for duty despite omissions of petitioner relative to the conditions in the workplace, to wit:
repeated notices served upon him of the disapproval of his application for leave
ofabsence, the same falls within the purview of Civil Law, to wit: 1. Petitioners textile mills have excessive flying textile dust and waste in its
operations and no effort was exerted by petitioner to minimize or totally
As early as Singapore Airlines Limited v. Pao, we established that not all disputes eradicate it;
between an employer and his employee(s) fall within the jurisdiction of the labor
tribunals. We differentiated between abandonment per seand the manner and 2. Petitioner failed to provide adequate and sufficient dust suction facilities;
consequent effects of such abandonment and ruled that the first, is a labor case, while
the second, is a civil law case.
3. Textile machines are cleaned with air compressors aggravating the dusty disease which is now irreversible and incurable, and deprived him of job
work place; opportunities.52 Clearly, injury and damages were allegedly suffered by respondent,
an element of quasi-delict. Secondly, the previous contract of employment between
4. Petitioner has no physician specializing in respiratoryrelated illness petitioner and respondent cannot be used to counter the element of "no pre-existing
considering it is a textile company; contractual relation" since petitioners alleged gross negligence in maintaining a
hazardous work environment cannot be considered a mere breach of such contract of
5. Petitioner has no device to detectthe presence or density of dust which is employment, but falls squarely within the elements of quasi-delictunder Article 2176
airborne; of the Civil Code since the negligence is direct, substantive and
independent.53 Hence, we ruled in Yusen Air and Sea Services Phils., Inc. v.
Villamor54 that:
6. The chemical and color room are not equipped with proper safety
chemical nose mask; and
When, as here, the cause of action is based on a quasi-delictor tort, which has no
reasonable causal connection with any of the claims provided for in Article 217,
7. The power and boiler plant emit too much smoke with solid particles
jurisdiction over the action is with the regular courts.55
blown to the air from the smoke stack of the power plant emitting a brown
rust color which engulfs the entire compound.46
It also bears stressing that respondent is not praying for any relief under the Labor
Code of the Philippines. He neither claims for reinstatement nor backwages or
In addition, respondent alleged that despite his earnest efforts to suggest to
separation pay resulting from an illegal termination. The cause of action herein
management to place roof insulation to minimize, if not, eradicate the health hazards
pertains to the consequence of petitioners omission which led to a work-related
attendant in the workplace, the same was not heeded.47
disease suffered by respondent, causing harm or damage to his person. Such cause of
action is within the realm of Civil Law, and jurisdiction over the controversy belongs
It is a basic tenet that jurisdiction over the subject matter is determined upon the to the regular courts.56
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
Our ruling in Portillo, is instructive, thus:
after and as a result of a trial. 48 Neither can jurisdiction of a court bemade to depend
upon the defenses made by a defendant in his answer or motion to dismiss. 49 In this
case, a perusal of the complaint would reveal that the subject matter is one of claim There is no causal connection between private respondents claim for damages and
for damages arising from quasi-delict, which is within the ambit of the regular court's the respondent employers claim for damages for the alleged "Goodwill Clause"
jurisdiction. violation. Portillos claim for unpaid salaries did not have anything to do with her
alleged violation of the employment contract as, in fact, her separation from
employmentis not "rooted" in the alleged contractual violation. She resigned from
The pertinent provision of Article 2176 of the Civil Code which governs quasi-
her employment. She was not dismissed. Portillos entitlementto the unpaid salaries
delictprovides that: Whoever by act or omissioncauses damageto another, there being
is not even contested. Indeed, Lietz Inc.s argument about legal compensation
fault or negligence, is obliged to pay for the damagedone. Such fault or negligence, if
necessarily admits that it owesthe money claimed by Portillo.57
there is no pre-existing contractual relation between the parties, is called quasi-
delict.50
Further, it cannot be gainsaid that the claim for damages occurred afterthe employer-
employee relationship of petitioner and respondent has ceased. Given that respondent
Thus, to sustain a claim liability under quasi-delict, the following requisites must
no longer demands for any relief under the Labor Code as well as the rules and
concur: (a) damages suffered by the plaintiff; (b) fault or negligence of the
regulations pertinent thereto, Article 217(a)(4) of the Labor Code is inapplicable to
defendant, or someother person for whose acts he must respond; and (c) the
the instant case, as emphatically held in Portillo, to wit:
connection of causeand effect between the fault or negligence of the defendant and
the damages incurred by the plaintiff.51
It is clear, therefore, that while Portillos claim for unpaid salaries is a money claim
that arises out ofor in connection with an employeremployee relationship, Lietz
In the case at bar, respondent alleges that due to the continued and prolonged
Inc.s claim against Portillo for violation of the goodwill clause is a money claim
exposure to textile dust seriously inimical to his health, he suffered work-contracted
based on an act done after the cessation of the employment relationship. And, while
the jurisdiction over Portillos claim is vested in the labor arbiter, the jurisdiction Guided by the aforequoted doctrines, we find no reason to reverse the findings of the
over Lietz Inc.s claim rests on the regular courts. Thus: CA.1wphi1 The RTC has jurisdiction over the subject matter of respondent's
complaint praying for moral damages, exemplary damages, compensatory damages,
As it is, petitioner does not ask for any relief under the Labor Code. It merely seeks anchored on petitioner's alleged gross negligence in failing to provide a safe and
to recover damages based on the parties' contract of employment as redress for healthy working environment for respondent. WHEREFORE, the petition is
respondent's breach thereof. Such cause of action is within the realm of Civil Law, DENIED. The Decision of the Court of Appeals, dated May 30, 2005, and its
and jurisdiction over the controversy belongs to the regular courts. More so must this Resolution dated January 10, 2006 in CA-G.R. SP No. 83099 are hereby
be in the present case, what with the reality that the stipulation refers to the post- AFFIRMED.
employment relations of the parties.58
SO ORDERED.
Where the 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, such claim falls outside the area of
competence of expertise ordinarily ascribed to the LA and the NLRC.59