PHILIPPINE WOOD PRODUCTS AND ALFREDO UY, PETITIONERS, VS. COURT OF INDUSTRIAL RELATIONS, TEODORICO GORME, ET AL., RESPONDENTS.

Philippine Wood Products versus Court of Industrial Relations

The Case

This is a special civil action for certiorari brought by Philippine Wood Products and its owner Alfredo Uy against the Court of Industrial Relations and a group of eight workers led by Teodorico Gorme. The petitioners ask the Supreme Court to annul two orders of the industrial court — one reopening a dismissed labor case and setting it for hearing, and one denying reconsideration — on the theory that the industrial court acted without or in excess of jurisdiction and with grave abuse of discretion. The case matters because it fixes, in plain terms, the dividing line between the jurisdiction of the Court of Industrial Relations and that of the regular courts over money claims of workers: the presence or absence of the employer-employee relationship, and whether reinstatement is sought.

Procedural History

On 6 January 1958 the eight respondents filed a petition with the Court of Industrial Relations for minimum wage differentials, overtime and holiday pay, separation pay in lieu of notice, attorney's fees, and reinstatement with back wages from 30 December 1954, the date of their dismissal. The petitioners moved to dismiss on the ground that the industrial court had no jurisdiction over what were mere claims for collection of overtime, differential and separation pay, and that the petition stated no cause of action because it did not allege that the dispute was causing or likely to cause a strike or lockout. On 12 February 1958 the industrial court dismissed the petition, holding that it had no jurisdiction over claims for workers' wages, overtime compensation or separation pay, and that it could take cognizance of reinstatement with back pay only in connection with an unfair labor practice case, the jurisdictional requisites of Section 4 of Commonwealth Act No. 103 being lacking.

On 2 October 1958 the respondents filed a petition to reopen the case, invoking the Supreme Court's ruling in Gomez versus North Camarines Lumber Company that such claims fall within the industrial court's jurisdiction. The petitioners opposed, arguing that the dismissal had become final and constituted res adjudicata. On 4 February 1959 the industrial court held that a dismissal for lack of jurisdiction could not constitute res adjudicata, and ordered the case reopened and set for hearing. Reconsideration was denied by the court in banc on 16 March 1959. The petitioners then came to the Supreme Court by certiorari, praying that the orders be annulled and that the industrial court be directed to desist from further proceeding.

Facts

The eight respondents had been employees of Philippine Wood Products. They were dismissed on 30 December 1954. Claiming that they had been underpaid, they demanded the difference between what they had received and what should have been paid as minimum wage, overtime and holiday compensation, and separation pay in lieu of notice, and they asked to be reinstated with back wages.

When they filed their petition with the Court of Industrial Relations in January 1958, that court dismissed it, following the then prevailing rule in PAFLU versus Tan, which denied the industrial court jurisdiction over such money claims. After the dismissal, the respondents brought their claims before Regional Office No. 3 of the Department of Labor.

In the meantime, the Supreme Court promulgated its decisions in Gomez versus North Camarines Lumber Company in August 1958 and in NASSCO versus Almin, holding that the Court of Industrial Relations has jurisdiction over claims for overtime services, minimum wage and separation pay. Relying on these new rulings, the industrial court reopened the respondents' case before the regional office could finally adjudicate their claims. The employer resisted, insisting that the dismissal had become final and barred reopening.

Issues

• Whether or not the Court of Industrial Relations has jurisdiction over the respondents' claims for minimum wage, overtime and holiday pay, separation pay, and reinstatement with back wages.
• Whether or not the requirement that the employees be at least thirty-one in number applies to such claims.
• Whether or not the dismissal of the respondents' petition, having become final, barred the reopening of the case under the principle of res adjudicata.

Applicable Provisions

The decision applies Republic Act No. 602, the Minimum Wage Law, under which the respondents claimed wage differentials:

Republic Act No. 602 is the Minimum Wage Law.

It bears on the case because the claim for minimum wage differentials is one of the claims the Court held to fall within the industrial court's jurisdiction when the employment relationship still exists or reinstatement is sought.

The decision also applies Commonwealth Act No. 444, the Eight Hour Labor Law, under which the respondents claimed overtime and holiday compensation:

Commonwealth Act No. 444 is the Eight Hour Labor Law.

It bears on the case because the claim for services rendered beyond eight hours and during legal holidays is likewise a claim arising out of the employment relationship.

The decision likewise applies Republic Act No. 1052, as amended, under which the respondents claimed separation pay in lieu of notice:

Republic Act No. 1052, as amended, governs separation pay in lieu of notice.

It bears on the case because the claim for separation pay, coupled with a demand for reinstatement, is treated as arising out of the employment relationship and thus within the industrial court's jurisdiction.

Finally, the decision refers to Section 4 of Commonwealth Act No. 103, as amended, whose jurisdictional requisites the industrial court found lacking when it first dismissed the petition:

Section 4 of Commonwealth Act No. 103, as amended, prescribes the jurisdictional requisites for the Court of Industrial Relations.

It bears on the case because the petitioners invoked the absence of those requisites, and the Court rejected that argument in light of the settled rule on claims connected with employment.

Ruling

On the first issue, the Court held that the industrial court has jurisdiction. It stated the settled rule in these words:

Where the employer-employee relationship is still existing or is sought to be reestablished because of its wrongful severance, as where the employee seeks reinstatement, the Court of Industrial Relations has jurisdiction over all claims arising out of, or in connection with employment, such as those related to the Minimum Wage Law and the Eight Hour Labor Law. After the termination of the relationship and no reinstatement is sought, such claims become mere money claims, and come within the jurisdiction of the regular courts.

Because the respondents' original petition sought not only overtime pay, minimum wage and separation pay but also reinstatement with back pay, the industrial court had jurisdiction.

On the second issue, the Court held that the requirement that the employees be thirty-one in number is not required of those claiming payment for overtime services and minimum wage and seeking reinstatement.

On the third issue, the Court held that the dismissal did not bar reopening. When the industrial court dismissed the petition in February 1958, it merely followed the then prevailing rule in PAFLU versus Tan. After the dismissal, the respondents filed their claims with the regional office of the Department of Labor. But after the Supreme Court promulgated Gomez versus North Camarines Lumber Company and NASSCO versus Almin, the industrial court could, and rightly so, reopen the case before the regional office could finally adjudicate the claims. The confusion brought about by the contradictory rules, the Court said, should not be attributed to the respondents and they should not be made to suffer by it.

Doctrine

Where the employer-employee relationship is still existing, or is sought to be reestablished because of its wrongful severance as where the employee seeks reinstatement, the Court of Industrial Relations has jurisdiction over all claims arising out of or in connection with employment, including claims under the Minimum Wage Law and the Eight Hour Labor Law. After the relationship is terminated and no reinstatement is sought, such claims become mere money claims and fall within the jurisdiction of the regular courts. The thirty-one employee requirement does not apply to claims for overtime and minimum wage coupled with a demand for reinstatement. And a dismissal for lack of jurisdiction does not constitute res adjudicata barring the reopening of the case when a supervening Supreme Court ruling clarifies the jurisdictional rule; the confusion caused by contradictory rules is not to be visited upon the workers.

Disposition

The Supreme Court denied the writs prayed for, with costs against the petitioners, thereby sustaining the orders reopening the case and setting it for hearing.

Remember This

Memorize the line: with reinstatement sought, the industrial court has jurisdiction over all employment claims; without it, they are mere money claims for the regular courts. Examiners use this case to test jurisdiction over labor money claims and the res adjudicata effect of a dismissal for lack of jurisdiction.