National Mines & Allied Workers' Union vs. Valero

The Court of Industrial Relations does not acquire jurisdiction over a controversy absent an employer-employee relationship between the parties, and jurisdiction over the action is determined by the allegations in the complaint.

Petitioner National Mines & Allied Workers' Union (NAMAWUMIF) is a labor organization with a local branch in Mercedes, Camarines Norte, whose members are dock workers and stevedores performing loading operations at the port of Mercedes. Private respondent Camarines Norte Mahogany Co., Inc. is a corporation engaged in exporting logs, utilizing the same port as its shipping point and maintaining a log pond there.

On May 20, 1970, petitioner sent a letter requesting private respondent to recognize it as the exclusive bargaining representative of all stevedores at the port and to give preference to its members for stevedoring work. Private respondent rejected the proposal, having already authorized Mercedes Arrastre to load its logs for export. Three days later, on May 23, 1970, petitioner entered into an agreement with Philippine Island Arrastre, an alleged contractor of respondent company, recognizing petitioner as the sole bargaining representative for the stevedores.

When the vessel "Dai Leung" arrived at the port on June 2, 1970, to load the company's logs, petitioner filed a notice of strike and prevented the loading operations. Consequently, private respondent filed a complaint for injunction with the Court of First Instance of Camarines Norte on June 3, 1970, alleging no connection with the union and claiming daily losses of $800.00 (P4,800.00) in demurrage. On the same day, the respondent Judge issued an ex parte writ of preliminary injunction enjoining petitioner from preventing the loading of logs to the vessel, and private respondent posted a P3,000.00 cash bond.

Petitioner moved for reconsideration and dismissal, arguing that the writ was issued without a hearing and that the case fell under the jurisdiction of the Court of Industrial Relations due to the existence of a labor dispute. On June 9, 1970, private respondent sought to modify the writ to cover any vessel, which the respondent court granted on June 18, 1970, while denying petitioner's motions on the ground of no privity of contract. Petitioner was declared in default on July 8, 1970, for failure to file an answer, prompting the filing of the present petition for certiorari and prohibition before the Supreme Court on July 10, 1970.

• Due Process: Petitioner argued that the writ of preliminary injunction dated June 3, 1970, was issued without a hearing, in violation of the fundamental principle of due process.
• Jurisdiction: Petitioner contended that the case is cognizable by the former Court of Industrial Relations because a labor dispute existed between the parties, even without an employer-employee relationship, pursuant to Section 2(j) of Republic Act No. 875. It further argued that an employer-employee relationship was established when its members were previously allowed to load logs aboard the vessel YAKAL following a Department of Labor settlement.
• Privity of Contract: Petitioner alleged that a privity of contract existed between the union and the respondent company through the agreement executed with Philippine Island Arrastre, acting as the company's contractor.

• Exception to Notice Requirement: Private respondent invoked Section 5, Rule 58 of the Rules of Court, arguing that the ex parte writ was proper because great or irreparable injury would result from the delay caused by the illegal picket, as evidenced by the daily demurrage charges.
• Absence of Employer-Employee Relationship: Private respondent stressed that no employer-employee relationship or any other relationship existed between the company and the union, thereby precluding the existence of a labor dispute under the jurisdiction of the Court of Industrial Relations.
• No Binding Agreement: Private respondent claimed it did not authorize Philippine Island Arrastre to negotiate with or recognize the petitioner union, meaning any agreement between them could not bind the company.

• Validity of the Injunction: Whether respondent Judge acted without or in excess of jurisdiction in issuing the questioned injunction orders ex parte.
• Jurisdiction: Whether the Court of Industrial Relations or the Court of First Instance has jurisdiction over the case.

• Validity of the Injunction: No. The writ of preliminary injunction was not improvidently issued, the ex parte issuance being justified under Section 5, Rule 58 of the Rules of Court due to the risk of great or irreparable injury from demurrage.
• Jurisdiction: The Court of First Instance has jurisdiction. The allegations in the complaint negated the existence of an employer-employee relationship, which is a requisite for the Court of Industrial Relations to acquire jurisdiction under Republic Act No. 875.

• Validity of the Injunction: The issuance of the writ was proper under Section 3 of Rule 58, as the verified complaint alleged that the union members illegally prevented the company's employees from loading logs. Under Section 5 of Rule 58, a writ may be granted ex parte upon a showing that the applicant would suffer great or irreparable injury before the matter can be heard on notice. The company faced daily demurrage charges of $800.00 (P4,800.00), justifying the immediate issuance. Furthermore, petitioner was not denied due process, as it was able to file motions for reconsideration where it exhaustively presented its arguments.
• Jurisdiction: Jurisdiction is determined by the allegations in the complaint. The complaint expressly alleged that the company had no connection with the union and had turned down its request to load logs, negating an employer-employee relationship. For the Court of Industrial Relations to acquire jurisdiction under Republic Act No. 875, an employer-employee relationship must exist. The test for this relationship is whether there is an understanding to render personal services and a right to order and control the performance of the work. The mere allegations of the union in its motions that a labor dispute existed did not automatically divest the CFI of jurisdiction. Any asserted relationship or binding effect of the agreement with Philippine Island Arrastre must be threshed out at trial.

• Jurisdiction over Labor Disputes — For the Court of Industrial Relations to acquire jurisdiction over a controversy under Republic Act No. 875, two circumstances must be present: (a) an employer-employee relationship must exist, or the claimant must seek reinstatement; and (b) the controversy must relate to a case certified by the President as involving national interest, or must have bearing on an unfair labor practice charge, or must arise under the Eight Hour Labor Law or the Minimum Wage Law. The Court applied this by finding that the complaint's allegations negated an employer-employee relationship, thus barring CIR jurisdiction.
• Test of Employer-Employee Relationship — The existence of an employer-employee relationship is determined by whether there is an understanding between the parties that one is to render personal services for the benefit of the other, and recognition of the right of one to order and control the other in the performance of the work and to direct the manner and method of performance.
• Jurisdiction Determined by Complaint Allegations — What determines the jurisdiction of the court is the allegations in the complaint. The Court relied on this principle to hold that the CFI retained jurisdiction because the complaint filed by the logging company negated any employer-employee relationship, regardless of the union's contrary allegations in its motions.
• Ex Parte Preliminary Injunction — A writ of preliminary injunction may be granted ex parte in cases where the delay made necessary by giving notice would prevent effective relief and might be productive of serious damage, as provided under Section 5, Rule 58 of the Rules of Court.

• "what determines jurisdiction of the court is the allegations in the complaint" — This passage articulates the fundamental principle that jurisdiction is conferred by the averments in the initiatory pleading, not by the defenses or claims raised in subsequent motions.
• "The test of the existence of 'employer and employee relationship' is whether there is an understanding between the parties that one is to render personal services to or for the benefit of the other, and recognition by them of the right of one to order and control the other in the performance of the work and to direct the manner and method of performance" — This defines the controlling standard for identifying an employer-employee relationship in the context of labor jurisdiction.

• Lat vs. Philippine Long Distance Telephone Co., Inc. — Cited to support the two requisites for the Court of Industrial Relations to acquire jurisdiction over a controversy under Republic Act No. 875.
• Campos vs. Manila Railroad Company — Cited alongside Lat to establish the jurisdictional requirements for the CIR.
• Madrigal Shipping Co. vs. Del Rosario — Cited as the source of the test for determining the existence of an employer-employee relationship.
• Gonzalo Puyat & Sons, Inc. vs. Labayo — Cited to support the doctrine that jurisdiction is determined by the allegations in the complaint.

• Section 5, Rule 58, Rules of Court — Provides the exception to the general rule that no preliminary injunction shall be granted without notice, allowing ex parte issuance upon a showing of great or irreparable injury. Applied to justify the immediate issuance of the writ due to demurrage risks.
• Section 3, Rule 58, Rules of Court — Enumerates the grounds for the issuance of a preliminary injunction. Applied to determine that the verified complaint sufficiently alleged entitlement to injunctive relief.
• Section 2(j), Republic Act No. 875 (Industrial Peace Act) — Defines a "labor dispute." The union relied on this to argue for CIR jurisdiction, but the Court found the absence of an employer-employee relationship precluded its application.

Aquino, Guerrero, Abad Santos, Escolin, and Cuevas, JJ., concurred. Concepcion, Jr., J., took no part.