Article. 217. Jurisdiction of the Labor Arbiters and the Commission.
(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and 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 absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:
2. Unfair labor practice cases;
3. Termination disputes;
4. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;
5. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
6. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and
7. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. (As amended by Section 9, Republic Act No. 6715, March 21, 1989).
Additional cases within the exclusive original jurisdiction of the LA:
1) Money claims arising out of E&E relationship or by virtue of any law or contract, involving Filipino workers for overseas development, including claims for actual, moral exemplary and other forms of damages as well as employment termination of OFWs
2) Wage distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant to RA 6727
3) Enforcement of compromise agreements when there is non-compliance by any of the parties pursuant to article 227
4) Other cases as may be provided for by law Comment:
Compulsory arbitration refers only to the proceeding before the LA hence the phrase “pending final resolution of the case by arbitration” should be understood to be limited only to the proceeding before the LA.
Exceptions to the exclusive original jurisdiction of the LA (first and last paragraph of 217)
1) Grievances arising from the interpretation or implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies and violations of the CBA which are not gross in character (261)
2) All other labor disputes which has been submitted for voluntary arbitration by the parties (262) Comment: (requisites for violation of CBA to become ULP)
In order for the LA to have jurisdiction for violations of the CBA the complaint must show prima facie the concurrence of the following:
1) Gross violations of the CBA
2) The violations pertains to the economic provisions of the CBA.
The existence of an E&E relationship is a jurisdictional requirement in order for the labor tribunals to take cognizance over a controversy
Jurisdiction over intra-corporate disputes PD 902-A
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations, partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving.
(a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers or partnership, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholder, partners, members of associations or organizations registered with the Commission;
(b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members, or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity; and
(c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or associations.
As amended by RA8799
5.2. The Commission’s jurisdiction over all cases enumerated under section 5 of Presidential Decree No.
902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court:
Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over the cases. The Commission shall retain jurisdiction over
pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payment/rehabilitation cases filed as of 30 June 2000 until finally disposed
Better policy rule:
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 subject of their controversy. 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 SEC (now the Regional Trial Court[20]) can resolve in the exercise of its adjudicatory or quasi-judicial power
Requisites of the Better Policy rule (Renato Real VS. Sangu Philippines 2011):
1) There must be an intra-corporate relationship:
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.
2) The nature and subject of the controversy
Whether the issue involved refers to intra-corporate matters Comment:
Under the case of DY vs NLRC the court has ruled that the non-payment or under payment of wages of a corporate officer stems from the corporate officer’s post brings the issue into a corporate dispute:
It is of no moment that Vailoces, in his amended complaint, seeks other reliefs which would seemingly fall under the jurisdiction of the Labor Arbiter, because a closer look at these — underpayment of salary and non-payment of living allowance — shows that they are actually part of the perquisites of his elective position, hence, intimately linked with his relations with the corporation. The question of remuneration, involving as it does, a person who is not a mere employee but a stockholder and officer, an integral part, it might be said, of the corporation, 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.
Further note should be taken that that the re-election or re-appointment of a corporate officer is clearly within the prerogative of the board hence this will constitute a intra-corporate controversy.
Corporate Officer
Are those officers of the corporation who are given that character by the Corporation Code or by the corporation’s by-laws. There are three specific officers whom a corporation must have under Section 25 of the Corporation Code. These are the president, secretary and the treasurer. The number of officers is not limited to these three. A corporation may have such other officers as may be provided for by its
by-laws like, but not limited to, the vice-president, cashier, auditor or general manager. The number of corporate officers is thus limited by law and by the corporation’s by-laws.
Hence a corporate office is an office established by:
1) Law 2) By-laws
3) And if provided in the by-laws that the board may appoint other officers, those elected or appointed by the board.
LA’s jurisdiction with respect to money claims:
1) If the claim regardless of amount, is accompanied with a claim of reinstatement
2) If the claim, whether or not accompanied with a claim for reinstatement , exceeds P5000 per claimant
Hence the only instance where the LA is deprived of jurisdiction, subject to the existence of a provision for voluntary arbitration, is when the amount is less than 5k and there is no claim for reinstatement Comment:
Money claims to be within the jurisdiction of the labor tribunals must have arisen from employment.
However note must be taken that money claims as a reward or prize in an incentive program (promos and the like), jurisdiction over which would depend upon the following factors:
1) The claim must arise out of or in connection with the existence of the E&E of the parties 2) Resolution of the issue requires the application of the labor laws
Absent any of the above criteria, the courts of general jurisdiction has jurisdiction. On the other hand where both criteria are present it is the labor tribunals which has jurisdiction.
Limitations to the jurisdiction of the LA in strike cases 1) Power to issue injunctions is lodge with the NLRC
2) Assumption of jurisdiction by the SOL or the Pres in cases involving an industry indispensable to national interest
3) Crimes committed during a strike, prosecution thereof lies in the courts of general jurisdiction.
Comment:
Money claims against the government is not within the jurisdiction of the Labor tribunals, despite the fact that there is an law expressly waiving the immunity of suit of the government, nonetheless under CA 327 all money claims must still be filed with the Commission on audit.
Comment:
A person is estopped from questioning the lack of jurisdiction over the subject of the court which he invoked and actively participated in the hearing thereof. The provision in the rules of court stating that lack of jurisdiction over the subject matter may be question anytime during appeal, stating that jurisdiction is conferred by law and not by the parties is of no moment since administrative bodies are not
bound with the strict rules of court but are at best merely supplementary. (delicates---- kasi un SC iba iba yun decision)
Comment on damages:
Not all damages are covered by the jurisdiction of the LA. The test to apply is that which law is the party seeking a remedy for if it is the civil law it should be the courts of general jurisdiction. In the case of portillo vs lietz the SC has ruled that the liquidated damages sought by the employer arose from the breach of the employee of the good will clause (non-compete clause) which necessarily meant that the cause of action accrued post-employment of the employee and that the employer is seeking protection under our civil laws and not under labor laws, hence the labor courts had no jurisdiction to allow legal compensation to be effected.
There is no causal connection between the petitioner employees’ claim for unpaid wages and the respondent employers’ claim for damages for the alleged "Goodwill Clause" violation. Portillo’s claim for unpaid salaries did not have anything to do with her alleged violation of the employment contract as, in fact, her separation from employment is not "rooted" in the alleged contractual violation. She resigned from her employment. She was not dismissed. Portillo’s entitlement to the unpaid salaries is not even contested. Indeed, Lietz Inc.’s argument about legal compensation necessarily admits that it owes the money claimed by Portillo.
The alleged contractual violation did not arise during the existence of the employer-employee relationship. It was a post-employment matter, a post-employment violation. Reminders are apt.
That is provided by the fairly recent case of Yusen Air and Sea Services Phils., Inc. v. Villamor,31 which harked back to the previous rulings on the necessity of "reasonable causal connection"
between the tortious damage and the damage arising from the employer-employee relationship.
Yusen proceeded to pronounce that the absence of the connection results in the absence of jurisdiction of the labor arbiter. Importantly, such absence of jurisdiction cannot be remedied by raising before the labor tribunal the tortious damage as a defense. Thus:
When, as here, 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. [citation omitted]
As it is, petitioner does not ask for any relief under the Labor Code. It merely seeks to recover damages based on the parties’ contract of employment as redress for respondent’s breach thereof.
Such cause of action is within the realm of Civil Law, and jurisdiction over the controversy belongs to the regular courts. More so must this be in the present case, what with the reality that the stipulation refers to the postemployment relations of the parties.
Article. 218. Powers of the Commission.
The Commission shall have the power and authority:
(a) To promulgate rules and regulations governing the hearing and disposition of cases before it and its regional branches, as well as those pertaining to its internal functions and such rules and regulations
as may be necessary to carry out the purposes of this Code; (As amended by Section 10, Republic Act No. 6715, March 21, 1989).
(b) To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance and testimony of witnesses or the production of such books, papers, contracts, records, statement of accounts, agreements, and others as may be material to a just determination of the matter under investigation, and to testify in any investigation or hearing conducted in pursuance of this Code;
(c) To conduct investigation for the determination of a question, matter or controversy within its jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who has been summoned or served with notice to appear, conduct its proceedings or any part thereof in public or in private, adjourn its hearings to any time and place, refer technical matters or accounts to an expert and to accept his report as evidence after hearing of the parties upon due notice, direct parties to be joined in or excluded from the proceedings, correct, amend, or waive any error, defect or irregularity whether in substance or in form, give all such directions as it may deem necessary or expedient in the determination of the dispute before it, and dismiss any matter or refrain from further hearing or from determining the dispute or part thereof, where it is trivial or where further proceedings by the Commission are not necessary or desirable; and
(d) To hold any person in contempt directly or indirectly and impose appropriate penalties therefor in accordance with law.
A person guilty of misbehavior in the presence of or so near the Chairman or any member of the Commission or any Labor Arbiter as to obstruct or interrupt the proceedings before the same, including disrespect toward said officials, offensive personalities toward others, or refusal to be sworn, or to answer as a witness or to subscribe an affidavit or deposition when lawfully required to do so, may be summarily adjudged in direct contempt by said officials and punished by fine not exceeding five hundred pesos (P500) or imprisonment not exceeding five (5) days, or both, if it be the Commission, or a member thereof, or by a fine not exceeding one hundred pesos (P100) or imprisonment not exceeding one (1) day, or both, if it be a Labor Arbiter. The person adjudged in direct contempt by a Labor Arbiter may appeal to the Commission and the execution of the judgment shall be suspended pending the resolution of the appeal upon the filing by such person of a bond on condition that he will abide by and perform the judgment of the Commission should the appeal be decided against him. Judgment of the Commission on direct contempt is immediately executory and unappealable. Indirect contempt shall be dealt with by the Commission or Labor Arbiter in the manner prescribed under Rule 71 of the Revised Rules of Court; and (As amended by Section 10, Republic Act No. 6715, March 21, 1989).
(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party: Provided, That no temporary or permanent injunction in any case involving or growing out of a labor dispute as defined in this Code shall be issued except after hearing the testimony of witnesses, with opportunity for cross-examination, in support of the
allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and only after a finding of fact by the Commission, to the effect:
(1) That prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained, but no injunction or temporary restraining order shall be issued on account of any threat, prohibited or unlawful act, except against the person or persons, association or organization making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof;
(2) That substantial and irreparable injury to complainant’s property will follow;
(3) That as to each item of relief to be granted, greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief;
(4) That complainant has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection.
Such hearing shall be held after due and personal notice thereof has been served, in such manner as the Commission shall direct, to all known persons against whom relief is sought, and also to the Chief Executive and other public officials of the province or city within which the unlawful acts have been threatened or committed, charged with the duty to protect complainant’s property: Provided, however, that if a complainant shall also allege that, unless a temporary restraining order shall be issued without notice, a substantial and irreparable injury to complainant’s property will be unavoidable, such a temporary restraining order may be issued upon testimony under oath, sufficient, if sustained, to justify the Commission in issuing a temporary injunction upon hearing after notice. Such a temporary restraining order shall be effective for no longer than twenty (20) days and shall become void at the expiration of said twenty (20) days. No such temporary restraining order or temporary injunction shall be issued except on condition that complainant shall first file an undertaking with
Such hearing shall be held after due and personal notice thereof has been served, in such manner as the Commission shall direct, to all known persons against whom relief is sought, and also to the Chief Executive and other public officials of the province or city within which the unlawful acts have been threatened or committed, charged with the duty to protect complainant’s property: Provided, however, that if a complainant shall also allege that, unless a temporary restraining order shall be issued without notice, a substantial and irreparable injury to complainant’s property will be unavoidable, such a temporary restraining order may be issued upon testimony under oath, sufficient, if sustained, to justify the Commission in issuing a temporary injunction upon hearing after notice. Such a temporary restraining order shall be effective for no longer than twenty (20) days and shall become void at the expiration of said twenty (20) days. No such temporary restraining order or temporary injunction shall be issued except on condition that complainant shall first file an undertaking with