Cabe vs. Tumang

The Labor Regional Office and the National Labor Relations Commission have no jurisdiction over a claim by an independent contractor for payment of labor and materials under a construction contract; their jurisdiction under Article 217 of the Labor Code is confined to claims arising from an employer-employee relationship.

The spouses Ronald and Purita Cabe engaged Samuel Tamayo in March 1979 to construct their residential house for P106,000 in accordance with plans and specifications prepared by an architect. The dispute implicated the jurisdiction of the Labor Regional Office of the Department of Labor and Employment over claims arising from construction contracts, a matter governed by Article 217 of the Labor Code, which limits that jurisdiction to claims arising from employer-employee relationships.

In March 1979, Samuel Tamayo agreed to construct for the spouses Ronald Cabe and Purita Cabe their residential house for P106,000 in accordance with the plans and specifications prepared by an architect. Tamayo started the work. The Cabes dispensed with his services when he allegedly made certain deviations from the plans. The house was finished by other persons.

On June 28, 1979, Tamayo sued the Cabes in the Regional Office of the Department of Labor in Laoag City for the recovery of P7,000 as payment of labor and materials. He filed the case as head carpenter of his 18 co-workers, whose wages he had advanced, and for reimbursement of materials which he had purchased.

• Jurisdiction: Petitioners argued that the Assistant Regional Director acted without jurisdiction over Tamayo's claim.

• Jurisdiction: Whether the Labor Regional Office had jurisdiction over Tamayo's claim for payment of labor and materials arising from a construction contract.
• Employment Status: Whether Tamayo was an employee of the Cabes or an independent contractor.

• Jurisdiction: No. The Labor Regional Office and the National Labor Relations Commission have no jurisdiction over Tamayo's claim, because their jurisdiction is confined to claims arising from an employer-employee relationship under Article 217 of the Labor Code.
• Employment Status: Independent contractor. Tamayo was an independent contractor and not an employee of the Cabes; his claim was therefore cognizable by the municipal trial court.

• Jurisdiction: Article 217 of the Labor Code confines the jurisdiction of the Labor Regional Office and the National Labor Relations Commission to claims arising from an employer-employee relationship. Because Tamayo was an independent contractor, no employer-employee relationship existed between him and the Cabes. His claim for payment of labor and materials under the construction contract thus fell outside that jurisdiction. The claim was cognizable by the municipal trial court.
• Employment Status: Tamayo was characterized as an independent contractor and not an employee of the Cabes. The decision rests on that characterization: Tamayo had agreed to construct the Cabes' residential house for P106,000 in accordance with plans and specifications prepared by an architect, and his claim was for payment of labor and materials under that construction contract. No employer-employee relationship was established.

• Jurisdiction over employer-employee claims — Under Article 217 of the Labor Code, the Labor Regional Office and the National Labor Relations Commission have jurisdiction only over claims arising from an employer-employee relationship. In this case, because Tamayo was an independent contractor, his claim for labor and materials under a construction contract did not arise from such a relationship and was outside that jurisdiction.
• Independent contractor — Tamayo, who agreed to construct the Cabes' residential house for P106,000 in accordance with plans and specifications prepared by an architect, was held to be an independent contractor and not an employee of the Cabes. The determination removed the claim from the labor arbitration machinery and placed it within the jurisdiction of the municipal trial court.

• "We hold that Tamayo was an independent contractor and not an employee of the Cabes. The Labor Regional Office and the National Labor Relations Commission had no jurisdiction over his claim." — This is the core holding: it characterizes Tamayo as an independent contractor and states the jurisdictional consequence.
• "Their jurisdiction is confined to claims arising from employer-employee relationship (Art. 217, Labor Code; Mafinco Trading Corporation vs. Ople, L-37790, March 25, 1976, 70 SCRA 139; Aguda vs. Vallejos, G.R. No. 58133, March 26, 1982, 113 SCRA 69). Tamayo's claim is cognizable by the municipal trial court." — This states the controlling jurisdictional rule and identifies the proper forum for Tamayo's claim.
• "This case is about the jurisdiction of the Labor Regional Office over a breach of a construction contract." — This frames the subject matter and the jurisdictional question resolved.

• Mafinco Trading Corporation vs. Ople, L-37790, March 25, 1976, 70 SCRA 139 — Cited by the Court in support of the rule that the Labor Regional Office's jurisdiction is confined to claims arising from an employer-employee relationship.
• Aguda vs. Vallejos, G.R. No. 58133, March 26, 1982, 113 SCRA 69 — Cited for the same jurisdictional limitation; the Court relied on these precedents in holding that Tamayo's independent-contractor claim was outside the labor arbiter's jurisdiction.

• Article 217, Labor Code — The Court cited this provision as the source of the Labor Regional Office and National Labor Relations Commission's jurisdiction over claims arising from employer-employee relationships. Because Tamayo was an independent contractor, his claim for labor and materials under the construction contract did not fall within Article 217, and the labor office lacked jurisdiction.

Makasiar (Chairman), Concepcion, Jr., Abad Santos, Escolin and Cuevas, JJ., concur.