**Facts:**
The case involves Geronimo Q. Quadra, the Chief Legal Officer of the Philippine Charity Sweepstakes Office (PCSO), who was dismissed from service following his involvement with union activities. Quadra, active in organizing and leading the Philippine Charity Sweepstakes Employees Association (CUGCO) and the Association of Sweepstakes Staff Personnel and Supervisors (ASSPS), faced administrative charges by the PCSO for neglect of duty and misconduct in April 1964. On July 14, 1965, the Civil Service Commission found him guilty as charged, recommending his dismissal, which was promptly executed by the PCSO General Manager the following day.
Quadra sought reconsideration and, together with ASSPS, filed a complaint for unfair labor practice against PCSO in the Court of Industrial Relations (CIR), designated as Case No. 4312-ULP. CIR, on November 19, 1966, pronounced PCSO guilty of unfair labor practice and ordered Quadra’s reinstatement with full backwages. Despite complying, PCSO contested the CIR’s decision in the Supreme Court under G.R. No. L-27546. Concurrently, Quadra petitioned for damages on March 16, 1967, invoking the Supreme Court’s decision in Rheem of the Philippines, Inc. v. Ferrer, which validated CIR’s authority over damage claims related to employee dismissals.
The labor arbiter awarded Quadra moral and exemplary damages amounting to P1.6 million in 1980. This decision was affirmed by the NLRC, leading PCSO to challenge it at the Court of Appeals, which eventually reversed the NLRC’s ruling by finding no bad faith in Quadra’s dismissal and considered the separate claim for damages as splitting the cause of action.
**Issues:**
1. Whether PCSO acted in bad faith in dismissing Quadra, in contradiction with a final and executory decision by the CIR, which was reinforced by the Supreme Court.
2. Whether the Court of Appeals erred in considering Quadra’s separate claims for moral and exemplary damages as splitting the cause of action under Rule 2, Section 4 of the 1997 Rules of Civil Procedure.
**Court’s Decision:**
The Supreme Court found merit in Quadra’s arguments, reversing the decision of the Court of Appeals and reinstating the NLRC’s decision. The Court held that:
1. PCSO acted in bad faith by dismissing Quadra based on his union activities, thus contravening the principles of fair labor practice and justifying the award of moral and exemplary damages.
2. The claim for damages did not constitute splitting of cause of action because at the time of the original unfair labor practice and illegal dismissal claims, the prevailing law did not permit CIR to award damages, a circumstance altered by the Rheem v. Ferrer ruling, thus legitimately allowing Quadra to file his claim for damages subsequently.
**Doctrine:**
This case reinforces the principle that dismissed employees are entitled to moral damages when the dismissal is rooted in bad faith, fraud, or oppressive acts against labor. Moreover, it clarifies that claims for damages arising out of an employee’s illegal dismissal treated in separate proceedings do not constitute splitting of cause of action if the jurisdictional authority of the court to award such damages was established after the initiation of the initial claim.
**Class Notes:**
– An employee’s dismissal due to union activities can constitute bad faith and unfair labor practice, warranting moral and exemplary damages.
– Claims for damages arising after a primary legal action (e.g., for reinstatement and backwages) do not amount to splitting of cause of action if justified by a change in legal jurisprudence or authority.
– Relevant legal provisions and principles include the 1997 Rules of Civil Procedure concerning splitting the cause of action, and labor rights protections against unfair labor practices as provided in the Labor Code of the Philippines.
**Historical Background:**
This case highlights the judicial recognition of the importance of labor rights and the protective measures against unfair labor practices in the Philippines during the mid-20th century. It reflects the evolving jurisdiction of labor courts and the Supreme Court concerning claims related to wrongful dismissal and labor rights violations, demonstrating the balance between administrative disciplinary actions and the rights of employees to organize and seek redress for grievances.
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