G.R. No.

112139 January 31, 2000

LAPANDAY AGRICULTURAL DEVELOPMENT CORPORATION, petitioner,

vs.
THE HONORABLE COURT OF APPEALS (Former Eighth Division) and COMMANDO
SECURITY SERVICE AGENCY, INC., respondents

Facts:
plaintiff Commando Security Service Agency, Inc., and defendant Lapanday Agricultural
Development Corporation entered into a Guard Service Contract. Plaintiff provided security
guards in defendant's banana plantation.
Wage Order No. 5 was promulgated directing an increase of P3.00 per day on the minimum
wage of workers in the private sector... and a P5.00... increase on the ECOLA.
This was followed... by Wage Order No. 6 which further increased said minimum wage by P3.00
on the ECOLA
Plaintiff demanded that its Guard Service Contract with defendant be upgraded in compliance
with Wage Order Nos. 5 and 6. Defendant refused. Their Contract expired on June 6, 1986
without the rate adjustment called for Wage Order Nos. 5 and 6 being implemented.
The trial court decided in favor of the plaintiff.
It held... the Wage Orders made specific provisions to amend existing contracts for security
services by allowing the adjustment of the consideration paid by the principal to the security
agency concerned.
petitioner asserts that private respondent has no factual and legal basis to collect the benefits
under subject Wage Order Nos. 5 and 6 intended for the security guards without the
authorization of the security guards concerned. Inasmuch as the... services of the forty-two...
security guards were already terminated at the time the complaint was filed... private
respondent's complaint partakes of the nature of an action for recovery of what was supposedly
due the guards under said Wage Orders, amounts... that they claim were never paid by private
respondent and therefore not collectible by the latter from the petitioner.
petitioner submits that it is the National Labor Relations Commission (NLRC) and not the civil
courts that has jurisdiction to resolve the issue involved in this case for it refers to the
enforcement of wage adjustment and other benefits due to private respondent's... security guards
mandated under Wage Order Nos. 5 and 6
On the other hand, private respondent contends that the basis of its action against petitioner-
appellant is the enforcement of the Guard Service Contract entered into by them... the
increases/adjustments in wages... are due to private respondent and not to the security guards
who are not parties to the said contract. It is therefore immaterial whether or not private
respondent paid its security... guards their wages as adjusted by said Wage Orders and that since
the forty-two (42) security guards are not parties to the Guard Service Contract, there is no need
for them to authorize the filing of, or be joined in, this suit.
As regards the jurisdiction of the RTC, private respondent alleges... that
The... enforcement of this... written contract does not fall under the jurisdiction of the NLRC
because the money claims involved therein did not arise from employer-employee relations
between the parties and is intrinsically a civil dispute.
Issue:
whether or not petitioner is liable to the private respondent for the wage adjustments provided
under Wage Order Nos. 5 and 6
Ruling:
We resolve to grant the petition.
We resolve first the issue of jurisdiction. We agree with the respondent that the RTC has
jurisdiction over the subject matter of the present case. It is well settled in law and jurisprudence
that where no employer-employee relationship exists between the parties and no issue is...
involved which may be resolved by reference to the Labor Code, other labor statutes or any
collective bargaining agreement, it is the Regional Trial Court that has jurisdiction.
In its complaint, private respondent is not seeking any relief under the
Labor Code but seeks payment of a sum of money and damages on account of petitioner's
alleged breach of its obligation under their Guard Service Contract.
The action is within the realm of civil law hence jurisdiction over the case belongs to the regular
courts.
the principal (petitioner) and the contractor (respondent) are jointly and severally liable to the
employees for their wages.
the joint and several liability of the contractor and the principal is mandated by the Labor Code
to assure compliance with the provisions therein including the minimum wage. The contractor is
made liable by... virtue of his status as direct employer. The principal, on the other hand, is made
the indirect employer of the contractor's employees to secure payment of their wages should the
contractor be unable to pay them.
Even in the absence of an... employer-employee relationship, the law itself establishes one
between the principal and the employees of the agency for a limited purpose i.e. in order to
ensure that the employees are paid the wages due them. In the above-mentioned cases, the
solidary liability of the... principal and contractor was held to apply to the aforementioned Wage
Order Nos. 5 and 6.
It is clear also from the foregoing that it is only when contractor pays the increases mandated that
it can claim an adjustment from the principal to cover the increases payable to the security
guards. The conclusion that the right of the contractor (as principal debtor) to... recover from the
principal as solidary co-debtor) arises only if he has paid the amounts for which both of them are
jointly and severally liable... is in line with Article 1217 of the Civil Code which provides
He who made payment may claim from his codebtors only the share which corresponds to each
It will be seen that the liability of the petitioner to reimburse the respondent only arises if and
when respondent actually pays its employees the increases granted by Wage Order Nos. 5 and 6.
However, it is not disputed that the private respondent has not actually paid the security guards
the wage increases granted under the Wage Orders in question.
private respondent has no cause of action against petitioner to recover the wage increases.
Needless to stress, the increases in wages are intended for the benefit of... the laborers and the
contractor may not assert a claim against the principal for salary wage adjustments that it has not
actually paid.
the petition is GRANTED.
G.R. No. 106231 November 16, 1994

HAWAIIAN-PHILIPPINE COMPANY, petitioner,

vs.
REYNALDO J. GULMATICO, Labor Arbiter, Regional Arbitration Branch No. VI, AND
NATIONAL FEDERATION OF SUGAR WORKERS-FOOD AND GENERAL TRADES
representing all the sugar farm workers of the HAWAIIAN PHILIPPINE MILLING
DISTRICT, respondents

FACTS:

The National Federation of Sugar Workers-Food and General Trades (NFSW-

FGT) claimed that the sugar farm workers within petitioner’s milling district have never availed
of the benefits due them under the law.

Petitioner contends that the complaint filed against it cannot be categorized under any of the case
s falling within the jurisdiction of the Labor Arbiter as enumerated in Article 217 of the Labor C
ode, as amended, considering that no employer-
employee relationship exists between petitioner milling company and the farm workers represent
ed by respondent union.

ISSUE:

Whether or not the Labor Arbiter has jurisdiction over a case wherein no employer-
employee relationship exists between the company and the farm workers.

HELD:

While the jurisdiction over controversies involving agricultural workers has been transferred fro
m the Court of Agrarian Relations to the Labor Arbiters under the Labor Code as amended, the s
aid transferred jurisdiction is however, not without limitations. The dispute or controversy must s
till fall under one of the cases enumerated under Article 217 of the Labor Code, which cases, aris
e out of or are in connection with an employer-employee relationship.

In the case at bar, it is clear that there is no employer-

employee relationship between petitioner milling company and respondent union and/or its mem
bers-
workers, a fact which, the Solicitor General notes, public respondent did not dispute or was silent
about. Absent the jurisdictional requisite of an employer-
employee relationship between petitioner and private respondent, the inevitable conclusion is tha
t public respondent is without jurisdiction to hear and decide the case with respect to petitioner.
 G.R. No. 124382 August 16, 1999

PASTOR DIONISIO V. AUSTRIA, petitioner,

vs.
HON. NATIONAL LABOR RELATIONS COMMISSION (Fourth Division), CEBU
CITY, CENTRAL PHILIPPINE UNION MISSION CORPORATION OF THE
SEVENTH-DAY ADVENTISTS, ELDER HECTOR V. GAYARES, PASTORS REUBEN
MORALDE, OSCAR L. ALOLOR, WILLIAM U. DONATO, JOEL WALES, ELY
SACAY, GIDEON BUHAT, ISACHAR GARSULA, ELISEO DOBLE, PORFIRIO
BALACY, DAVID RODRIGO, LORETO MAYPA, MR. RUFO GASAPO, MR.
EUFRONIO IBESATE, MRS. TESSIE BALACY, MR. ZOSIMO KARA-AN, and MR.
ELEUTERIO LOBITANA, respondents

KTA: Relationship of the church as an employer and the minister as an employee is purely
secular in nature because it has no relation with the practice of faith, worship or doctrines of the
church, such affairs are governed by labor laws. The Labor Code applies to all establishments,
whether religious or not.

Facts:

The Seventh Day Adventists(SDA) is a religious corporation under Philippine law. The petitioner
was a pastor of the SDA for 28 years from 1963 until 1991, when his services were terminated.

On various occasions from August to October 1991, Austria received several communications
form Ibesate, the treasurer of the Negros Mission, asking him to admit accountability and
responsibility for the church tithes and offerings collected by his wife, Thelma Austria, in his
district and to remit the same to the Negros Mission.

The petitioner answered saying that he should not be made accountable since it was Pastor Buhat
and Ibesate who authorized his wife to collect the tithes and offerings since he was very ill to be
able to do the collecting.

A fact-finding committee was created to investigate. The petitioner received a letter of dismissal
citing:
1) Misappropriation of denominational funds;
2) Willful breach of trust;
3) Serious misconduct;
4) Gross and habitual neglect of duties; and
5) Commission of an offense against the person of 
employer's duly authorized representative
as grounds for the termination of his services.

Petitioner filed a complaint with the Labor Arbiter for illegal dismissal, and sued the SDA
for reinstatement and backwages plus damages. Decision was rendered in favor of petitioner.

SDA appealed to the NLRC. Decision was rendered in favor of respondent.

Issue:

1. Whether or not the termination of the services of the petitioner is an ecclesiastical affair, and, as
such, involves the separation of church and state.

2. Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed
by petitioner against the SDA.

Held/Ratio:

1. No. The matter at hand relates to the church and its religious ministers but what is involved here
is the relationship of the church as an employer and the minister as an employee, which is purely
secular because it has no relationship with the practice of faith, worship or doctrines. The grounds
invoked for petitioner’s dismissal are all based on Art. 282 of Labor Code.

2. Yes. SDA was exercising its management prerogative (not religious prerogative) to fire an
employee which it believes is unfit for the job. It would have been a different case if Austria was
expelled or excommunicated from the SDA.
G.R. No. L-68544 October 27, 1986

LORENZO C. DY, ZOSIMO DY, SR., WILLIAM IBERO, RICARDO GARCIA AND
RURAL BANK OF AYUNGON, INC., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION AND EXECUTIVE LABOR
ARBITER ALBERTO L. DALMACION, AND CARLITO H. VAILOCES, respondents

G.R. No. 79762 January 24, 1991

FORTUNE CEMENT CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (First Division) and ANTONIO M.
LAGDAMEO, respondents
G.R. No. 118088 November 23, 1995

MAINLAND CONSTRUCTION, CO., INC., and/or LUCITA LU CARABUENA,

ROBERT L. CARABUENA, ELLEN LU CARABUENA, and MARTIN LU, petitioners,
vs.
MILA MOVILLA, ERNESTO MOVILLA, JR., MILA JUDITH C. MOVILLA, JUDE
BRIX C. MOVILLA, JONARD ELLERY C. MOVILLA, AND MAILA JONAH M.
QUIMBO, surviving heirs of ERNESTO MOVILLA, and THE HONORABLE
COMMISSIONER of the NATIONAL LABOR RELATIONS COMMISSION-5TH
DIVISION, respondents

Facts:
HERMOSISIMA, JR., J.:
Mainland Construction Co., Inc. is a domestic corporation, duly organized and existing under
Philippine laws, having been issued a certificate of registration by the
SEC
Its principal line... of business is the general construction of roads and bridges and the operation
of a service shop for the maintenance of equipment. Respondents on the other hand, are the
surviving heirs of complainant, Ernesto Movilla, who died during the pendency of the action
with the
Labor Arbiter.
Records show that Ernesto Movilla, who was a Certified Public Accountant during his lifetime,
was hired as such by Mainland in 1977. Thereafter, he was promoted to the position of
Administrative Officer with a monthly salary of P4,700.00.
Ernesto Movilla, recorded as receiving a fixed salary of P4,700.00 a month, was registered with
the Social Security System (SSS) as an employee of petitioner corporation. His contributions to
the SSS, Medicare and Employees Compensation Commission (ECC) were deducted from... his
monthly earnings by his said employer.
On April 12, 1987, during petitioner corporation's annual meeting of stockholders, the following
were elected members of the Board of Directors, viz: Robert L. Carabuena, Ellen L. Carabuena,
Lucita Lu Carabuena, Martin G. Lu and Ernesto L. Movilla.
On the same day, an organizational meeting was held and the Board of Directors elected Ernesto
Movilla as Administrative Manager.[3] He occupied the said position up to the time of his death.
On April 2, 1991, the
DOLE... conducted a routine inspection on petitioner corporation and found that it committed
such irregularities in the conduct of its business as:
"1. Underpayment of wages under R.A. 6727 and RTWPB-XI-01;
2. Non-implementation of Wage Order No. RTWPB-XI-02;
 3. Unpaid wages for 1989 and 1990;
4. Non-payment of holiday pay and service incentive leave pay; and
5. Unpaid 13th month pay (remaining balance for "1990."[4]
On the basis of this finding, petitioner corporation was ordered by DOLE to pay to its thirteen
employees, which included Movilla, the total amount of P309,435.89, representing their salaries,
holiday pay, service incentive leave pay differentials, unpaid wages and 13th month... pay.
All the employees listed in the DOLE's order were paid by petitioner corporation, except Ernesto
Movilla.
On October 8, 1991, Ernesto Movilla filed a case against petitioner corporation and/or Lucita,
Robert, and Ellen, all surnamed Carabuena, for unpaid wages, separation pay and attorney's fees,
with the Department of Labor and Employment, Regional Arbitration, Branch XI, Davao
City.
On February 29, 1992, Ernesto Movilla died while the case was being tried by the Labor Arbiter
and was promptly substituted by his heirs, private respondents herein, with the consent of the
Labor Arbiter.
The Labor Arbiter rendered judgment on June 26, 1992, dismissing the complaint on the ground
of lack of jurisdiction. Specifically, the Labor Arbiter made the following ratiocination:
"It is clear that in the case at bar, the controversy presented by complainant is intra-corporate in
nature and is within the jurisdiction of the Securities and Exchange Commission, pursuant to
P.D. 902-A (Phil. School of Business Administration, et al. v. Leano,... G.R. No. L-58468,
February 24, 1984; Dy et al. v. NLRC, et al., G.R. No. L-68544, October 27, 1986). What
Movilla is claiming against respondents are his alleged unpaid salaries and separation pay as
Administrative Manager of the corporation for which position he was... appointed by the Board
of Directors. His claims therefore fall under the jurisdiction of the Securities and Exchange
Commission because this is not a simple labor problem; but a matter that comes within the area
of corporate affairs and management, and is in fact a... corporate controversy in contemplation of
the Corporation Code. (Fortune Cement Corporation v. NLRC, et al., G.R No. 79762, January
24, 1991)."[5]
Aggrieved by this decision, respondents appealed to the National Labor Relations Commission
(NLRC). The NLRC ruled that the issue in the case was one which involved a labor dispute
between an employee and petitioner corporation and, thus, the NLRC had jurisdiction to...
resolve the case.
Issues:
the NLRC or the SEC - has jurisdiction over the controversy.
Ruling:
We find for the respondents, it appearing that petitioners' contention is bereft of merit.
In order that the SEC can take cognizance of a case, the controversy must pertain to any of the
following relationships: a) between the corporation, partnership or association and the public; b)
between the corporation, partnership or association and its stockholders, partners,... members or
officers; c) between the corporation, partnership or association and the State as far as its
franchise, permit or license to operate is concerned; and d) among the stockholders, partners or
associates themselves.[7] The fact that the parties... involved in the controversy are all
stockholders or that the parties involved are the stockholders and the corporation does not
necessarily place the dispute within the ambit of the jurisdiction of SEC. The better policy to be
followed in determining jurisdiction over a... case should be to consider concurrent factors such
as the status or relationship of the parties or the nature of the question that is the subject of their
controversy.[8] In the absence of any one of these factors, the SEC will not have jurisdiction.
Furthermore, it does not necessarily follow that every conflict between the corporation and its
stockholders would involve such corporate matters as only the SEC can resolve in the exercise of
its adjudicatory or quasi-judicial powers.[9]
In the case at bench, the claim for unpaid wages and separation pay filed by the complainant
against petitioner corporation involves a labor dispute. It does not involve an intra-corporate
matter, even when it is between a stockholder and a corporation. It relates to... an employer-
employee relationship which is distinct from the corporate relationship of one with the other.
Moreover, there was no showing of any change in the duties being performed by complainant as
an Administrative Officer and as an Administrative Manager after his election... by the Board of
Directors. What comes to the fore is whether there was a change in the nature of his functions
and not merely the nomenclature or title given to his job.
As correctly ruled by the NLRC:
"The claims for unpaid salaries/monetary benefits and separation pay are not a corporate conflict
as respondents presented them to be. If complainant is not an employee, respondent should have
contested the DOLE inspection report. What they did was to... exclude complainant from the
order of payment x x x and worse, he was not both given responsibilities and paid his salaries for
the succeeding months x x x. This is a clear case of constructive dismissal without due process x
x x."[12]
The existence of an employer-employee relationship is a factual question and public respondent's
findings are accorded great weight and respect as the same are supported by substantial
evidence.[13] Hence, we uphold the conclusion of public respondent that
Ernesto Movilla was an employee of petitioner corporation.
It is pertinent to note that petitioner corporation is not prohibited from hiring its corporate
officers to perform services under a circumstance which will make him an employee.[14]
Moreover, although a director of a corporation is not, merely by virtue of... his position, its
employee, said director may act as an employee or accept duties that make him also an
employee.[15]
Since Ernesto Movilla's complaint involves a labor dispute, it is the NLRC, under Article 217 of
the Labor Code of the Philippines, which has jurisdiction over the case at bench.
G.R. No. 80774 May 31, 1988

SAN MIGUEL CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and RUSTICO VEGA, respondents

FACTS:

San Miguel Corporation sponsored an Innovation Program and under which, the management un
dertook to grant cash awards to all SMC employees except higher-
ranked personnel who submit to the Corporation ideas and suggestions found to be beneficial to
the Corporation. Rustico Vega then submitted a proposal but was not accepted. Vega filed a com
plaint against the company with the Regional Arbitration Branch No. VII, contending that he sho
uld be paid 60,000 since his idea was implemented. The petitioner in his answer stated that they
turned down the proposal for lack of originality. The labor Arbiter dismissed the complaint on th
e ground that the money claim is not a necessary incident of his employment. Upon appeal of Ve
ga to the NLRC, it ordered the petitioner to pay the 60,0000. Petitioner then seek to annul the jud
gment on the ground that the Labor Arbiter and NLRC have no jurisdiction over the case.

ISSUE:
Whether or not the fact that the money claim of an employee arose out of or in connection with
employment relation with his company, is enough to bring such money claim within the original
and exclusive jurisdiction of Labor Arbiter.

HELD:
No, just because the claim arises from employer-
employee relationship, it does not follow that it is automatically within the jurisdiction of the Lab
or Arbiter.

The company’s undertaking, though unilateral in origin, could nonetheless ripen into an enforcea
ble contractual (facio ut des) obligation on the part of petitioner Corporation under certain circu
mstances. Thus, whether or not an enforceable contract, albeit implied arid innominate, had arise
n 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 a
nd conditions of employment, but rather having recourse to our law on contracts.

If the relief sought is to be resolved not by reference to the Labor Code or other labor relations st
atute or a collective bargaining agreement but by the general civil law, the jurisdiction over the d
ispute 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 th
e general civil law.