Getz Corporation Phils., Inc. vs. Court of Appeals

Under PD 1691, Labor Arbiters and the NLRC have exclusive jurisdiction over all money claims of workers and all other claims arising from employer-employee relations, including moral and exemplary damages; regular courts have no jurisdiction over such claims. A dismissed employee’s suit against his employer for termination pay, other employment benefits, and moral and exemplary damages therefore falls outside the CFI’s jurisdiction.

Getz Corporation Philippines, Inc. is a domestic corporation engaged in the distribution and sale of consumer goods and machinery and heavy equipment throughout the Philippines; the other petitioners are its officers. Samuel Erum was employed by Getz, and Leticia Siwa Erum is his wife. The dispute concerns whether regular courts may take cognizance of money and damages claims arising out of an employer-employee relationship, against the statutory backdrop of PD 1367 and its supersession by PD 1691.

Petitioner Getz Corporation Philippines, Inc. is a domestic corporation engaged in the distribution and sale of consumer goods as well as machinery and heavy equipment throughout the Philippines, and the other petitioners are its officers. Respondent Samuel Erum was employed by Getz on January 3, 1969 as Territory Salesman; he was subsequently promoted to Area Manager, then to District Manager, and was District Manager for the Visayas and Mindanao areas with home base at Cebu City when his services were terminated on January 8, 1979 by Getz for alleged loss of trust and confidence, gross negligence in the performance of managerial functions, and violation of company policies.

On March 20, 1979, Samuel, with his wife Leticia Siwa Erum as co-plaintiff, filed against Getz and its officers with the Court of First Instance of Negros Oriental an action for Recovery of Termination Pay, Other Employment Benefits and Damages, docketed as Civil Case No. 7214. He prayed that his dismissal be declared oppressive, malicious, and illegal; that the effective date of termination of his employment be fixed as of the date of the finality of the Decision; and that petitioners be ordered to pay in solidum his unpaid salary and other employment benefits, termination pay, moral and exemplary damages, attorney’s fees, and costs.

The claims sought by Samuel were for unpaid salary and other employment benefits, termination pay, moral and exemplary damages, attorney’s fees, and costs, all arising from the termination of his employment with Getz. Leticia joined the complaint as co-plaintiff.

• Jurisdiction over Employer-Employee Claims: Petitioners argued that the acts complained of arose out of an employer-employee relationship and properly pertained to Labor Arbiters, so the Calderon case was not applicable.
• PD 1691 and Damages: Petitioners argued that under PD 1691, private respondents’ claim for actual and compensatory damages was now within the exclusive competence of labor tribunals.
• Scope of Trial Court’s Jurisdiction: Petitioners argued that the Trial Court had no jurisdiction to rule on the legality of respondent’s dismissal, to fix the date of termination of his employment, and to award salary and other employment benefits.
• Venue and Leticia’s Cause of Action: Petitioners moved to dismiss on the grounds that venue was improperly laid and that the Complaint stated no cause of action insofar as plaintiff Leticia Siwa Erum was concerned.

• Applicability of Calderon: Respondents contended that the grounds relied upon for review were without merit and reiterated the applicability of the Calderon case.
• Substantiality and Delay: Respondents contended that the grounds raised were unsubstantial to merit consideration by the SC and that the Petition was intended for delay.
• PD 1367 and Regular Court Jurisdiction: Respondent argued, through a motion for reconsideration citing the SC Resolution in Garcia vs. Martinez, 90 SCRA 331 (1979), that PD 1367 gave ordinary courts jurisdiction to award actual and moral damages in case of illegal dismissal, and that the amendatory decree was deemed a curative statute and given retroactive effect to cover a claim filed in a regular court before its issuance.

• Jurisdiction over Employer-Employee Money Claims and Damages: Whether the Court of First Instance has jurisdiction over a dismissed employee’s claims for unpaid salary, other employment benefits, termination pay, moral and exemplary damages arising out of employer-employee relationship, or whether such jurisdiction is exclusively vested in Labor Arbiters and the NLRC under PD 1691.
• Applicability of PD 1691 to the Case: Whether PD 1691, which superseded PD 1367, governs the trial court’s jurisdiction when it dismissed the case on December 5, 1980 and reinstated it on April 9, 1981, even though the cause of action arose while PD 1367 was still in effect.

• Jurisdiction over Employer-Employee Money Claims and Damages: No. Under PD 1691, Labor Arbiters have original and exclusive jurisdiction over all money claims of workers and all other claims arising from employer-employee relations, including moral and exemplary damages; the CFI had no jurisdiction over the complaint.
• Applicability of PD 1691 to the Case: Yes. PD 1691 had already superseded PD 1367 when the trial court dismissed the case on December 5, 1980 and reconsidered and reinstated it on April 9, 1981, so the Calderon premise based on PD 1367 no longer applied.

• Jurisdiction over Employer-Employee Money Claims and Damages: PD 1691, Article 217(a), vests Labor Arbiters with original and exclusive jurisdiction over all money claims of workers, including separation pay and other benefits, and all other claims arising from employer-employee relations unless expressly excluded; Article 217(b) vests the NLRC with exclusive appellate jurisdiction. The SC held that the provisions are comprehensive enough to include claims for moral and exemplary damages of a dismissed employee against his employer. Samuel’s dismissal gave rise to the cause of action, and his claims for termination pay, other employment benefits, and damages clearly arose out of an employer-employee relationship. The CFI therefore had no jurisdiction over the complaint for unpaid salary, other employment benefits, termination pay, moral and exemplary damages.
• Applicability of PD 1691 to the Case: Although the cause of action came into being when PD 1367—stipulating that “Labor Arbiters shall not entertain claims for moral or other forms of damages”—was still in effect and upon which Calderon was premised, that Decree was no longer applicable when the Trial Court dismissed the case for lack of jurisdiction on December 5, 1980 and when it reconsidered and set aside the dismissal on April 9, 1981. PD 1367 had been superseded by PD 1691 enacted on May 1, 1980, which restored to Labor Arbiters and the NLRC exclusive jurisdiction over all money claims of workers and all other claims arising from employer-employee relations, including moral and exemplary damages. Thus, Calderon did not support the trial court’s reinstatement of the case.

• Exclusive Jurisdiction of Labor Arbiters and the NLRC — PD 1691 vests Labor Arbiters with original and exclusive jurisdiction over all money claims of workers, including separation pay and other benefits, and all other claims arising from employer-employee relations unless expressly excluded; the NLRC has exclusive appellate jurisdiction. The SC applied this to a dismissed employee’s claims for termination pay, other employment benefits, and moral and exemplary damages.
• Comprehensive Scope of “All Other Claims Arising from Employer-Employee Relations” — The phrase covers claims for moral and exemplary damages of a dismissed employee against his employer. The SC held that the statutory language is comprehensive enough to include such damages, so they cannot be pursued in regular courts.
• Supersession of PD 1367 by PD 1691 — PD 1367’s rule that Labor Arbiters shall not entertain claims for moral or other damages was superseded by PD 1691. The SC held that although the cause of action arose under PD 1367, that decree was no longer applicable when the trial court dismissed and later reinstated the case because PD 1691 had already taken effect.

• “The issue for resolution concerns the jurisdiction of regular Courts of justice over claims for money and damages arising out of employer-employee relationship.” — Frames the sole jurisdictional question decided by the SC.
• “PD 1367 had been superseded by PD 1691 enacted on May 1, 1980, which restored to Labor Arbiters and the National Labor Relations Commission (NLRC) exclusive jurisdiction over all money claims of workers and all other claims arising from employer-employee relations, including moral and exemplary damages.” — Establishes the statutory shift that defeated the Calderon premise.
• “Thus, the conclusion is inescapable that the Court of First Instance of Negros Oriental has no jurisdiction over the complaint filed by private respondents before it for unpaid salary and other employment benefits, termination pay, moral and exemplary damages.” — States the direct jurisdictional conclusion.

• Calderon vs. Court of Appeals, 100 SCRA 459 — Relied on by the trial court and the CA; the SC found it inapplicable because its premise, PD 1367, had been superseded by PD 1691 by the time the trial court acted.
• Garcia vs. Martinez, 84 SCRA 577 (1978), and Resolution in Garcia vs. Martinez, 90 SCRA 331 (1979) — The trial court cited the 1978 decision; respondent cited the 1979 Resolution setting aside that decision under PD 1367; the SC noted that the PD 1367 premise no longer applied.
• Ebon vs. de Guzman, G.R. No. 58265, March 25, 1982 — Cited in the decision’s footnotes for the rule that claims for moral and exemplary damages fall within the comprehensive scope of employer-employee claims.

• Presidential Decree No. 1367 — Provided that “Labor Arbiters shall not entertain claims for moral or other forms of damages”; the SC noted it was the premise of Calderon but was no longer applicable after PD 1691.
• Presidential Decree No. 1691, Article 217(a) and (b) — Vested Labor Arbiters with original and exclusive jurisdiction over all money claims of workers, including separation pay and other benefits, and all other claims arising from employer-employee relations unless expressly excluded; vested the NLRC with exclusive appellate jurisdiction. The SC applied it to include moral and exemplary damages and to divest the CFI of jurisdiction.