JOSE EDWIN G. ESICO, PETITIONER, VS. ALPHALAND CORPORATION AND ALPHALAND DEVELOPMENT, INC., RESPONDENTS.

Esico versus Alphaland

The Case

This is a labor case that began as a dispute between Jose Edwin G. Esico, a helicopter pilot and security officer, and Alphaland Corporation and Alphaland Development, Inc., his employers. Esico complained of illegal dismissal and non-payment of wages; Alphaland, in turn, complained of wrongful resignation and demanded reimbursement of his training expenses. The case matters because the Supreme Court, on reconsideration, settled two questions every labor lawyer must know: whether labor tribunals have jurisdiction over an employer's money claim against a resigning employee, and how the Court treats a motion for reconsideration that merely repeats arguments already passed upon.

Procedural History

The labor arbiter dismissed Esico's complaint for illegal dismissal for lack of merit, but ordered Alphaland to pay his proportionate thirteenth month pay, and ordered Esico to reimburse Alphaland nine hundred ninety-seven thousand seven hundred pesos representing the unserved portion of his training expenses. On appeal, the National Labor Relations Commission reversed, declaring Esico constructively dismissed and awarding backwages, separation pay, unpaid salaries, and attorney's fees, while absolving him of the reimbursement. Alphaland went to the Court of Appeals on certiorari; the appellate court annulled the Commission and reinstated the labor arbiter's decision with modification, adjusting the reimbursement to nine hundred seventy-seven thousand seven hundred twenty pesos. Esico then elevated the matter to the Supreme Court by petition for review on certiorari. In a Decision dated November 17, 2021, the Supreme Court granted Esico's petition, held that the labor tribunals lacked jurisdiction over Alphaland's complaint for wrongful resignation, found no constructive dismissal, and awarded Esico unpaid salaries. Alphaland filed a Motion for Partial Reconsideration and a Supplemental Motion, and it is these that the Court now resolves.

Facts

In March 2010, PhilWeb Corporation offered Esico the position of Risk and Management Security Officer, and Alphaland concurrently engaged him as a rotary wing pilot to fly the Chairperson of its group of companies. The engagement letter stated that his compensation would be paid by PhilWeb, and that Alphaland would advance the expenses for his training. In turn, Esico agreed to render service to Alphaland for a minimum period of five years, and to reimburse the training expenses, subject to a proportionate reduction of five percent per completed quarter of actual service, should he fail to complete that period. He signed his conformity.

Esico completed his Eurocopter flight training in 2010 and underwent Cessna flight training in the United States in May 2011 at Alphaland's expense. He repeatedly sought clarification of his employment status and salary as pilot, but received no response. In August 2011, Alphaland gave him a Job Offer Sheet for the position of Pilot, which he signed, believing it was a separate compensation package; he claimed the salary stated there was never paid. In December 2011, he discovered he could no longer access his payroll with PhilWeb, and was told this was because of his transfer to Alphaland effective December 1, 2011.

On July 3, 2012, Esico submitted a resignation letter effective immediately. Because of his pretermination of the contract, Alphaland demanded reimbursement of his training expenses and filed a complaint for wrongful resignation with damages before the labor arbiter. Esico, for his part, filed a complaint for illegal dismissal and non-payment of wages. The labor arbiter consolidated the two cases.

Issues

• Whether or not the labor tribunals have jurisdiction over Alphaland's claim for wrongful resignation and damages against Esico.
• Whether or not Esico is liable to reimburse Alphaland for the training expenses corresponding to the unserved portion of his five-year undertaking.
• Whether or not the arguments raised in Alphaland's Motion for Partial Reconsideration and Supplemental Motion warrant a modification of the Court's earlier ruling.

Applicable Provisions

Article 224 of the Labor Code, as renumbered, provides:

ARTICLE 224. [217] Jurisdiction of the Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: (1) Unfair labor practice cases; (2) Termination disputes; (3) If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; (4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; (5) Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and (6) Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos ([PHP]5,000.00) regardless of whether accompanied with a claim for reinstatement.

This provision is the basis for the Court's holding that Alphaland's claim for reimbursement, arising from the employer-employee relationship, falls within the original and exclusive jurisdiction of the labor tribunals.

Ruling

On the first issue, the Court reversed its earlier position and held that the labor tribunals do have jurisdiction over Alphaland's claim. It relied on its recent ruling in Comscentre Philippines, Inc. versus Rocio, where it held that labor tribunals have jurisdiction over an employer's money claim arising from an employee's pretermination of the employment contract, provided the claim arises from or is necessarily connected with the fact of termination. The Court explained that Esico's act of prematurely terminating the employment contract gave rise to Alphaland's cause of action for reimbursement, making the claim an offshoot of his resignation. It warned that a contrary ruling would open the possibility of conflicting findings between the labor tribunals and the regular courts. The Court also cited Bañez versus Valdevilla, where it held that the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the Civil Code.

On the second issue, the Court found Esico liable. The engagement letter expressly provided a minimum service period of five years in consideration of Alphaland's training expenses, and Esico signed his conformity. The same undertaking was adopted in the August 10, 2011 letter covering his Cessna training. Esico failed to comply when he resigned before the lapse of the five-year period despite undergoing both training courses at Alphaland's expense.

On the third issue, the Court noted that the matters raised by Alphaland had been exhaustively passed upon in the assailed Decision, and thus need not be belabored. Nevertheless, after a painstaking review of the factual milieu and the applicable legal precepts, it found a partial modification of its earlier ruling in order.

Doctrine

First, labor tribunals have original and exclusive jurisdiction over an employer's claim for damages or reimbursement against an employee, provided the claim arises from or is necessarily connected with the employer-employee relationship — such as a claim for training expenses arising from the employee's premature resignation. Second, a contractual undertaking to serve a minimum period in consideration of training expenses advanced by the employer is binding on the employee who signed it, and breach thereof gives rise to liability for reimbursement subject to the agreed proportionate reduction. Third, a motion for reconsideration that merely repeats arguments already passed upon need not be belabored; but the Court retains the power to modify its ruling upon a painstaking review of the facts and the law.

Disposition

The Court partially modified its earlier Decision, sustaining the labor tribunals' jurisdiction over Alphaland's claim and ordering Esico to reimburse Alphaland the portion of his training expenses corresponding to the unserved years of his five-year undertaking.

Remember This

The single line worth memorizing: an employer's claim for reimbursement of training expenses arising from an employee's premature resignation falls within the jurisdiction of the labor tribunals, because it is inseparably intertwined with the employer-employee relationship. Examiners like to use this case to test jurisdiction over employer money claims and the binding effect of minimum service period undertakings.