REPUBLIC SAVINGS BANK, PETITIONER, VS. THE HONORABLE COURT OF INDUSTRIAL RELATIONS AND NARCISO MACARAEG, RESPONDENTS.

Republic Savings Bank versus Court of Industrial Relations

The Case

This is a petition brought by Republic Savings Bank against the Court of Industrial Relations and Narciso Macaraeg, asking the Supreme Court to stop the industrial court from taking cognizance of a claim for overtime pay filed by a former security guard. The bank contends that the Court of Industrial Relations has no jurisdiction over a pure money claim once the employee has already been separated from the service. The case matters because it draws the dividing line between the jurisdiction of the Court of Industrial Relations and that of the ordinary courts over labor money claims, a distinction every labor law examinee must be able to state on demand.

Procedural History

Narciso Macaraeg filed a complaint against Republic Savings Bank before the Court of Industrial Relations for the collection of overtime pay for services rendered as security guard from July 1955 to July 1958, when he was separated from the bank. After filing its answer, the bank moved to dismiss on the ground that the Court of Industrial Relations had no jurisdiction over the case. The hearing judge, Associate Judge Emiliano C. Tabigne, granted the motion to dismiss. On motion for reconsideration, however, a majority of the respondent court sitting en banc reconsidered the order of dismissal and remanded the case for trial and the reception of evidence on the merits. The bank then came to the Supreme Court by petition, praying that the order giving due course to the complaint be set aside and the complaint dismissed.

Facts

Narciso Macaraeg served as a security guard of Republic Savings Bank from July 1955 until July 1958, when he was separated from the bank. After his separation, he filed a complaint before the Court of Industrial Relations to collect overtime pay for the services he had rendered during that period.

His complaint sought only overtime pay. There was no claim that he was entitled to be reinstated in his position, and no petition to that effect was filed. Neither did he allege that his separation was illegal, or that he still had the right to continue in the service or to be reinstated by virtue of a contract or otherwise.

The bank moved to dismiss for lack of jurisdiction. The hearing judge dismissed the case, but the court en banc reversed and remanded for trial, prompting the bank to seek relief from the Supreme Court.

Issues

• Whether or not the Court of Industrial Relations has jurisdiction to take cognizance of a claim for overtime pay filed by an employee who has already been separated from the service and who seeks neither reinstatement nor a declaration that his separation is illegal.
• Whether or not the ruling in the Monares case, which sustained the jurisdiction of the Court of Industrial Relations, applies to a complaint that seeks only money claims and no reinstatement.

Applicable Provisions

Section 16 of Republic Act Numbered Six Hundred Two, which the Court identifies as the source of jurisdiction over money claims, provides:

Section 16. Jurisdiction of courts. The civil courts shall have original jurisdiction over all cases involving violations of the Minimum Wage Law and claims for wages, overtime pay, and other money claims arising from employer-employee relations, except those which fall under the exclusive jurisdiction of the Court of Industrial Relations.

This provision bears on the case because the Court holds that a pure money claim, once the employee has been separated and seeks no reinstatement, falls within the jurisdiction of the ordinary courts rather than the Court of Industrial Relations.

Ruling

On the first issue, the Court ruled that the Court of Industrial Relations has no jurisdiction. In a long line of decisions, the Court had already held that under Republic Act Numbered Eight Hundred Seventy-Five the Court of Industrial Relations no longer has jurisdiction to take cognizance of money claims, and that jurisdiction over such claims is vested in a competent court by Section 16 of Republic Act Numbered Six Hundred Two. The Court, however, had excepted from that ruling cases in which an employee or laborer continues in the service of his employer or seeks reinstatement after dismissal or separation. Here, Macaraeg had already been separated from the service when he instituted the action, and he made no claim that his separation was illegal or that he still had the right to continue in the service or to be reinstated. Under this circumstance, the Court held, the action is purely a money claim cognizable by the ordinary courts of justice in accordance with Republic Act Numbered Six Hundred Two.

On the second issue, the Court rejected the reliance on the Monares case. In Monares, the complaint not only sought salary differentials and overtime pay but also reinstatement. That is precisely the exception. Because Macaraeg sought no reinstatement, Monares did not govern, and the respondent court erred in using it to sustain its jurisdiction.

Doctrine

The Court of Industrial Relations has no jurisdiction over a pure money claim for overtime pay or other labor money claims where the employee has already been separated from the service and seeks neither reinstatement nor a declaration that his separation is illegal. Jurisdiction over such claims is vested in the ordinary courts by Section 16 of Republic Act Numbered Six Hundred Two.

The exception is equally important: where the employee continues in the service of his employer, or seeks reinstatement after dismissal or separation, the Court of Industrial Relations retains jurisdiction, because the claim is then not a pure money claim but one intertwined with the employer-employee relationship and the right to continue in service.

Disposition

The petition was granted; the order of the Court of Industrial Relations reconsidering the order of dismissal was set aside, without prejudice to the filing of Macaraeg's claim in any competent court, and without costs.

Remember This

The single line worth memorizing: a pure money claim by an employee already separated from the service, who seeks no reinstatement, belongs to the ordinary courts, not the Court of Industrial Relations. Examiners use this case to test the money claim exception, so always ask whether the employee continues in service or seeks reinstatement, because that fact alone decides the forum.