CARDINAL INDUSTRIES, INC., PETITIONER, VS. HONORABLE AMADOR T. VALLEJOS AND MANUEL Z. RAMOS, RESPONDENTS.

Cardinal Industries versus Vallejos

The Case

This is a petition for certiorari brought by Cardinal Industries, Inc. against Judge Amador T. Vallejos and Manuel Z. Ramos. The petitioner asks the Supreme Court to set aside the trial judge's refusal to dismiss a complaint for a sum of money and damages filed by an overseas worker whose employment was terminated in Iraq. The case matters because it fixes the dividing line between the regular courts and the labor offices over money claims and damages arising from an overseas employment contract. It teaches that the presence of a claim for moral and exemplary damages does not by itself pull a labor dispute into the regular courts.

Procedural History

Manuel Z. Ramos filed a complaint for a sum of money and damages before the Court of First Instance of Manila, which took cognizance of the case. Cardinal Industries moved to dismiss on the ground that jurisdiction belonged to the Bureau of Employment Services under the amended Article 15 of the Labor Code. The trial judge denied the motion, relying on the Calderon ruling, and held that because the complaint alleged acts entitling the plaintiff to damages, the regular court had jurisdiction. To avoid being declared in default, the petitioner filed its answer, and the court set the case for pre-trial. Before pre-trial could proceed, Cardinal Industries went directly to the Supreme Court on a petition for certiorari, raising the question of which body had jurisdiction.

Facts

In January 1980, Cardinal Industries employed Manuel Z. Ramos as a rebar foreman for one year at one of its projects in Iraq, with a basic monthly salary of 490 dollars. On November 20, 1980, the company terminated his employment.

Ramos then sued in the Court of First Instance of Manila. He alleged that the company had prematurely terminated the contract without any just or valid cause. He claimed his salaries for the unexpired portion of the contract and the benefits he would have earned had he completed the twelve-month period. He also demanded 150,000 pesos in moral damages, 20,000 pesos in corrective and exemplary damages, 20,000 pesos in nominal damages, and 10,000 pesos in attorney's fees.

Cardinal Industries moved to dismiss, arguing that jurisdiction lay with the Bureau of Employment Services under the amendment introduced by Presidential Decree Number 1691. Ramos opposed, insisting that the regular court had jurisdiction because it had first taken cognizance of his claim for damages, which he could not have pleaded before the Bureau. The trial judge agreed with Ramos and denied the motion.

Issues

• Whether or not the complaint involves employer-employee relations and money claims arising out of a contract involving Filipino workers for overseas employment, over which the regional offices of the Ministry of Labor have original and exclusive jurisdiction.
• Whether or not the Calderon ruling still applies, given that the law prevailing when it was decided had already been superseded, and given that the Calderon case involved claims for compensation already earned rather than salaries for the unexpired portion of a contract.

Applicable Provisions

Article 15, paragraph (b) of the Labor Code, as amended by Presidential Decree Number 1691, provides:

(b) The regional offices of the Ministry of Labor shall have the original and exclusive jurisdiction over all matters or cases involving employer-employee relations including money claims, arising out of or by virtue of any law or contract involving Filipino workers for overseas employment except seamen: Provided, That the Bureau of Employment Services may, in the case of the National Capitol Region, exercise such power, whenever the Minister of Labor deems it appropriate. The decision of the regional offices or the Bureau of Employment Services if so authorized by the Minister of Labor as provided in this Article, shall be appealable to the National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The decision of the National Labor Relations Commission shall be final and inappealable.

This provision is the decisive text, because it vests original and exclusive jurisdiction over overseas employment money claims in the regional offices of the Ministry of Labor, and not in the regular courts.

Ruling

On the first issue, the Court ruled for the petitioner. It held that the claims of Ramos undeniably arose out of employer-employee relations involving overseas employment. They therefore fall within the original and exclusive jurisdiction of the regional offices of the Ministry of Labor under Article 15, paragraph (b) of the Labor Code, as amended. The Court noted that the complaint was filed after the enactment of Presidential Decree Number 1691.

On the second issue, the Court held that the Calderon ruling was no longer controlling. Calderon was decided when Presidential Decree Number 1367 was still in force, and that law had specifically divested Labor Arbiters and the National Labor Relations Commission of jurisdiction to award moral and other forms of damages. That decree had since been superseded by Presidential Decree Number 1691 and by Batas Pambansa Number 130, both of which took effect on the first of May 1980 and restored the jurisdiction of Labor Arbiters and the Commission over all money claims of workers and all other claims arising from employer-employee relations, including moral and exemplary damages. The Court also observed that Calderon dealt with the jurisdiction of Labor Arbiters under Article 217 of the Labor Code, and did not touch upon the jurisdiction of the Bureau of Employment Services under Article 15.

Doctrine

First, the regional offices of the Ministry of Labor have original and exclusive jurisdiction over all cases involving employer-employee relations, including money claims, arising out of or by virtue of any law or contract involving Filipino workers for overseas employment, except seamen. This is the plain command of Article 15, paragraph (b) of the Labor Code, as amended.

Second, the fact that a complaint includes claims for moral, exemplary, and nominal damages does not remove it from the labor offices and confer jurisdiction on the regular courts. Where the entire claim arises from the employment relation, the labor body has jurisdiction over it, damages included.

Third, a ruling interpreting a statute that has since been superseded does not bind later cases governed by the new law. The Calderon doctrine, rendered under Presidential Decree Number 1367, gave way once Presidential Decree Number 1691 and Batas Pambansa Number 130 restored the labor offices' authority over money claims and damages.

Disposition

The petition was granted, and the respondent judge was directed to dismiss the civil case, without prejudice to the right of Manuel Z. Ramos to refile his claims with the proper regional office of the Ministry of Labor.

Remember This

The one line to memorize: money claims and damages arising from an overseas employment contract belong to the regional offices of the Ministry of Labor, not to the regular courts. Examiners use this case to test jurisdiction over overseas workers' claims, and to see whether you know that a prayer for moral and exemplary damages does not convert a labor dispute into a civil action.