NATIONAL SHIPYARDS AND STEEL CORPORATION, PETITIONER, VS. COURT OF INDUSTRIAL RELATIONS AND DOMINGO DE JESUS, RESPONDENTS.

National Shipyards and Steel Corporation versus Court of Industrial Relations and Domingo de Jesus

The Case

This is a petition for certiorari filed by the National Shipyards and Steel Corporation, commonly called NASSCO, against the Court of Industrial Relations and Domingo de Jesus. NASSCO asks the Supreme Court to review and set aside the orders and decision of the industrial court which denied its motion to dismiss, declared the dismissal of De Jesus illegal, and ordered his reinstatement with overtime pay. The case matters because it maps the outer boundaries of the industrial court's jurisdiction: it teaches that a bare claim for reinstatement, or even reinstatement with back wages, does not by itself bring a controversy within the Court of Industrial Relations, and that the jurisdictional test is supplied by the allegations of the complaint.

Procedural History

On March 21, 1962, Domingo de Jesus filed a complaint with the Court of Industrial Relations, praying for reinstatement with back wages and for payment of overtime compensation. NASSCO filed its answer on April 6, 1962, raising lack of jurisdiction, failure to state a cause of action, laches or prescription, and the legality of the dismissal. On June 20, 1962, NASSCO moved to dismiss on the first three grounds. Associate Judge Arsenio I. Martinez denied that motion in an order dated July 30, 1962. After trial, Judge Martinez rendered a decision on March 12, 1963, finding the dismissal illegal or without just cause, ordering reinstatement, and awarding overtime compensation equivalent to 25 percent of the daily wage of 9.02 pesos for 32 hours covering June to September, 1960. NASSCO moved for reconsideration, and the Court of Industrial Relations en banc denied the motion in a resolution dated May 24, 1963. NASSCO then filed this petition for certiorari with the Supreme Court to review the order of July 30, 1962, the decision of March 12, 1963, and the resolution of May 24, 1963.

Facts

Domingo de Jesus testified that he had been employed by NASSCO as a welder since 1937. On October 14, 1960, he received a memorandum requiring him to explain within 72 hours why no administrative action should be taken against him for having taken or kept welding rods in his locker. He submitted his explanation, and his case was set for hearing. At the hearing, which lasted only five minutes, the investigator, Atty. Abundio Macalingcag, merely reprimanded him, and he was not given a chance to explain his side. He later learned through his union president that the investigator had recommended a one-month suspension. After one month he reported for work, but the union president told him to wait for the decision of the General Manager. He then learned from the manager that he had been suspended for 90 days. After the 90-day period he reported again, but management did not accept him. Atty. Macalingcag advised him to wait for the decision of the Board of Directors. He returned after six months from the date of his suspension and was informed that he had already been dismissed from the service.

De Jesus further testified that from June to September, 1960, he was required to work overtime because there was plenty of work, and that he had actually worked 20 hours of overtime a month for which he was paid only 12 hours, leaving a monthly balance of 8 hours unpaid, or 32 hours for the four months from June to September, 1960.

NASSCO presented as its sole witness Atty. Abundio Macalingcag, who testified that he investigated the administrative case, that on the date of the hearing, October 27, 1960, he apprised De Jesus of his right to be represented by counsel, that De Jesus said the service of the union president was enough, that he nonetheless appointed Atty. Augusto Trinidad as counsel de oficio, and that after the investigation he submitted his report to the Board of Directors finding De Jesus guilty. This witness did not touch on, nor refute, the testimony of De Jesus on his claim for overtime pay.

Issues

• Whether or not the Court of Industrial Relations has jurisdiction to take cognizance of the case.
• Whether or not the action of respondent De Jesus for reinstatement had already prescribed, or had been barred by laches.
• Whether or not the Court of Industrial Relations erred in awarding overtime compensation to respondent De Jesus.

Applicable Provisions

Section 7-A of Commonwealth Act 444, as amended by Republic Act 1993, governs the period for enforcing a right under the Eight-Hour Labor Law and provides:

An action to enforce a right under the Eight-Hour Labor Law can be brought any time within three years after the cause of action accrued.

This provision bears on the third issue because it fixes the three-year period within which De Jesus could sue for his unpaid overtime, counted from October, 1960, when his right of action accrued.

Section 16 of Rule 66 of the Rules of Court, cited in the ruling on laches, provides:

Petitioner, however, cannot be reinstated, since the present action for reinstatement is filed more than one year from his removal. As a public official in the service, he shall have begun his court action for reinstatement, be it by quo warranto or mandamus, within one year from his removal or separation, otherwise his action is barred.

This provision bears on the second issue because De Jesus, a welder in a corporation owned or controlled by the government and covered by the Civil Service Law, filed his action for reinstatement 17 months after his separation, beyond the one-year period.

Ruling

On the first issue, the Court held that the Court of Industrial Relations has jurisdiction. NASSCO argued that the case did not relate to a violation of the Minimum Wage Law, the Eight-Hour Labor Law, or unfair labor practice. The Court rejected this, restating the doctrine of the Prisco case as amplified in Campos versus Manila Railroad Company:

We may, therefore, restate, for the benefit of the bench and the bar, that in order that the Court of Industrial Relations may acquire jurisdiction over a controversy in the light of Republic Act No. 875, the following circumstances must be present: (a) there must exist between the parties an employer-employee relationship, or claimant must seek his reinstatement; and (b) the controversy must relate to a case certified by the President to the C.I.R. as one involving national interest, or must have a bearing on an unfair labor practice charge, or must arise either under the Eight-Hour Labor Law, or under the Minimum Wage Law. In default of any of these circumstances, the claim becomes a mere money claim that comes under the jurisdiction of the regular courts.

The Court explained that a mere action for reinstatement, or one coupled only with a claim for back wages and damages, is not enough to confer jurisdiction on the industrial court. What is required is that the action for reinstatement be accompanied by another claim arising out of the Minimum Wage Law or the Eight-Hour Labor Law. Jurisdiction over the subject matter is determined by the allegations of the complaint, and here the complaint prayed for reinstatement with back wages and also for payment of overtime compensation, the latter necessarily involving the Eight-Hour Labor Law. The Court added that it is settled that the Court of Industrial Relations has jurisdiction over claims for overtime compensation when coupled with a prayer for reinstatement, and that the satisfaction of unpaid wages may be ordered incidentally to that jurisdiction.

On the second issue, the Court held that the action for reinstatement is barred by laches. De Jesus, a welder of NASSCO, a corporation owned or controlled by the government, belonged to the unclassified service and was covered by the Civil Service Law. He was separated from the service as of October 14, 1960, and instituted the action for reinstatement only on March 21, 1962, after the lapse of 17 months. Without ruling on whether the industrial court could still modify or reverse the administrative decision or inquire into the cause of dismissal, the Court declared the action barred by laches, applying the rule that a person claiming a right to a position in the civil service must file a petition for reinstatement within one year, otherwise the action is barred.

On the third issue, the Court agreed with the industrial court that De Jesus should be awarded overtime compensation equivalent to 25 percent of his daily wage of 9.02 pesos for 32 hours covering June to September, 1960. The Court quoted the finding that De Jesus had rendered 20 hours of overtime a month from June to September, 1960, that he was paid only 12 hours a month, leaving 8 hours unpaid per month, or 32 hours over the four-month period, and that NASSCO introduced no evidence to deny or overcome the claim, the burden of proof being on the employer. The Court held this finding of fact conclusive. While the action for reinstatement was barred, the action for payment of overtime compensation was not, because the right of action accrued in October, 1960, the complaint was filed on March 21, 1962, and an action to enforce a right under the Eight-Hour Labor Law may be brought within three years after the cause of action accrued.

Doctrine

First, the Court of Industrial Relations acquires jurisdiction only when there exists an employer-employee relationship or the claimant seeks reinstatement, and the controversy relates to a case certified by the President as involving national interest, or bears on an unfair labor practice charge, or arises under the Eight-Hour Labor Law or the Minimum Wage Law. A mere claim for reinstatement, or reinstatement with back wages and damages, is a mere money claim cognizable by the regular courts. Second, jurisdiction over the subject matter is determined by the allegations of the complaint; a prayer for reinstatement coupled with a claim for overtime compensation arising under the Eight-Hour Labor Law suffices to confer jurisdiction on the industrial court. Third, a person claiming a right to a position in the civil service must file an action for reinstatement within one year from removal or separation, otherwise the action is barred by laches. Fourth, an action to enforce a right under the Eight-Hour Labor Law may be brought within three years after the cause of action accrued, and the employer bears the burden of disputing a claim of overtime.

Disposition

The petition is denied in the main; the decision and orders appealed from are affirmed in all other respects, with the modification that respondent De Jesus should not be reinstated and should not be paid his back wages, and without pronouncement as to costs.

Remember This

Memorize the rule that a claim for reinstatement alone, or with back wages, is a mere money claim outside the industrial court, but reinstatement coupled with a claim for overtime under the Eight-Hour Labor Law brings the case within its jurisdiction. Examiners use this case to test jurisdiction over labor claims and the one-year bar on actions for reinstatement in the civil service.