ALFREDO F. PRIMERO, PETITIONER, VS. INTERMEDIATE APPELLATE COURT AND DM TRANSIT, RESPONDENTS.

The question on which the petitioner’s success in the instant appeal
depends, and to which he would have us give an affirmative answer, is whether
or not, having recovered separation pay by judgment of the Labor Arbiter —
which held that he had been fired by respondent DM Transit Corporation without
just cause — he may subsequently recover moral damages
by action in a regular court, upon the theory that the manner of his dismissal
from employment was tortious and therefore his
cause of action was intrinsically civil in nature.

Petitioner Primero was discharged from
his employment as bus driver of DM Transit Corporation (hereafter, simply DM)
in August, 1974 after having been employed therein for over 6 years.  The circumstances attendant
upon that dismissal are recounted by the Court of Appeals^[1]
as follows:

“Undisputably, since August 1, 1974, appellee’s
bus dispatcher did not assign any bus to be driven by appellant Primero.  No reason
or cause was given by the dispatcher to appellant for not assigning a bus to
the latter for 23 days (pp. 6-14, 21-22, tsn, May 15, 1979).

“Also, for 23 days, appellant was given a run-around from one
management official to another, pleading that he be allowed to work as his
family was in dire need of money and at the same time inquiring (why) he was
not allowed to work or drive a bus of the company.  Poor appellant did not only get negative
results but was given cold treatment, oftentimes evaded and given confusing
information, or ridiculed, humiliated, or sometimes made to wait in the offices
of some management personnel of the appellee (pp.
2-29, tsn, May 15, 1979).

“(The) General Manager and (the) Vice-President and Treasurer
** wilfully and maliciously made said appellant **
seesaw or ** go back and forth between them for not less than ten (10) times
within a period of 23 days ** but (he) got negative results from both corporate
officials.  Worse, on the 23rd day of
his ordeal, appellant was suddenly told by General Manager Briones
to seek employment with other bus companies because he was already dismissed
from his job with appellee (without having been) told
of the cause of his hasty and capricious dismissal ** (pp. 8, 11-13, 25, tsn, May 15, 1979 *).

“Impelled to face the harsh necessities of life as a jobless
person and worried by his immediate need for money, appellant pleaded with
Corporate President Demetrio Munoz, Jr. for his
reinstatement and also asked P300.00 as financial assistance, but the latter
told the former that he (Munoz, Jr.) will not give him even one centavo and
that should appellant sue him in court, then that will be the time President
Munoz, Jr. will pay him, if Munoz, Jr. loses the case ** (pp. 21-22, tsn, May 15, 1979).

“Appellant also advised (the) President of the oppressive,
anti-social and inhumane acts of subordinate officers ** (but) Munoz, Jr. did
nothing to resolve appellant’s predicament and ** just told the latter to go
back ** to ** Briones, who insisted that appellant
seek employment with other bus firms in Metro Manila ** (but) admitted that the
appellant has not violated any company rule or regulation ** (pp. 23-26, tsn, May 15, 1979).

“** (I)n pursuance (of) defendant’s
determination to oppress plaintiff and cause further loss, irreparable injury,
prejudice and damage, (D.M. Transit) in bad faith and with malice persuaded
other firms (California Transit, Pascual Liner, De Dios Transit, Negrita
Corporation, and MD Transit) not to employ (appellant) in any capacity after he
was already unjustly dismissed by said defendant ** (paragraph 8 of plaintiff’s
complaint).

“These companies with whom appellant applied for a job called
up the D.M. Transit Office (which) ** told them ** that they should not accept
(appellant) because (he) was dismissed from that Office.”

Primero instituted proceedings against
DM with the Labor Arbiters of the Department of Labor, for illegal dismissal,
and for recovery of back wages and reinstatement.  It is not clear from the record whether these
proceedings consisted of one or two actions separately filed.  What is certain is that he withdrew his
claims for back wages and reinstatement, “with the end in view of
filing a damage suit” “in a civil court which has exclusive
jurisdiction over his complaint for damages on causes of action founded on tortious acts, breach of employment contract ** and
consequent effects (thereof).1

In any case, after due investigation, the Labor Arbiter rendered
judgment dated January 24, 1977 ordering DM to pay complainant Primero P2,000.00 as separation pay in accordance with the
Termination Pay Law.2 The judgment was affirmed by the
National Labor Relations Commission and later by the Secretary of Labor, the
case having been concluded at this level on March 3, 1978.1

Under the provisions of the Labor Code in force at that time,
Labor Arbiters had jurisdiction inter alia
over –

1)  claims involving
non-payment or underpayment of wages, overtime compensation, social security
and medicare benefits, and

2)  all other cases or
matters arising from employer-employee relations, unless otherwise expressly
excluded.2

And we have since held that under these “broad and
comprehensive” terms of the law, Labor Arbiters possessed original
jurisdiction over claims for moral and other forms of damages in labor
disputes.3

The jurisdiction of Labor Arbiters over such claims was however
removed by PD 1367, effective May 1, 1978,
which explicitly provided that “Regional Directors shall not indorse and Labor
Arbiters shall not entertain claims for moral or other forms of damages.”4

Some three months afterwards, Primero
brought suit against DM in the Court of First Instance of Rizal
seeking recovery of damages caused not only by the breach of his employment
contract, but also by the oppressive and inhuman, and consequently tortious, acts of his employer and its officers antecedent
and subsequent to his dismissal from employment without just cause.5

While this action was pending in the CFI, the law governing the
Labor Arbiters’ jurisdiction was once again revised.  The amending act was PD 1691, effective May 1, 1980.  It eliminated the restrictive clause placed
by PD 1367, that Regional Directors shall not indorse and Labor Arbiters
entertain claims for moral or other forms of damages.  And, as we have had occasion to declare in
several cases, it restored the principle that “exclusive and original
jurisdiction for damages would once again be vested in labor arbiters”;
eliminated “‘the rather thorny question as to where in labor matters the
dividing line is to be drawn ‘between the power lodged in an administrative
body and a court'”; and, “in the interest of greater promptness in
the disposition of labor matters, ** spared (courts of) the often onerous task
of determining what essentially is a factual matter, namely, the damages that
may be incurred by either labor or management as a result of disputes or
controversies arising from employer-employee relations.”6
Parenthetically, there was still another amendment of the provision in question
which, however, has no application to the case at bar.  The amendment was embodied in B.P. Blg. 227, effective June
1, 1982.1

On August 11,1980 the Trial Court
rendered judgment dismissing the complaint on the ground of lack of
jurisdiction, for the reason that at the time that the complaint was filed, on
August 17, 1978, the law — the Labor Code as amended by PD 1367, eff. May 1, 1978 — conferred exclusive, original
jurisdiction over claims for moral or other damages, not on ordinary courts,
but on Labor Arbiters.

This judgment was affirmed by the Intermediate Appellate Court,
by Decision rendered on June 29, 1984.  This is the judgment now subject of the
present petition for review on certiorari.  The decision was reached by a vote of 3 to
2.  The dissenters, placing reliance on
certain of our pronouncements, opined that Primero’s
causes of action were cognizable by the courts, that existence of employment
relations was not alone decisive of the issue of jurisdiction, and that such
relations may indeed give rise to “civil” as distinguished
from purely labor disputes, as where an employer’s right to dismiss his
employee is exercised tortiously, in a manner
oppressive to labor, contrary to morals, good customs or public policy.2

Primero has appealed to us from this
judgment of the IAC praying that we overturn the majority view and sustain the
dissent.

Going by the literal terms of the law, it would seem clear that
at the time that Primero filed his complaints for
illegal dismissal and recovery of backwages, etc.
with the Labor Arbiter, the latter possessed original and exclusive
jurisdiction also over claims for moral and other forms of damages;
this, in virtue of Article 2653 of PD 442, otherwise known as the
Labor Code, effective from May 1, 1974.  In
other words, in the proceedings before the Labor Arbiter, Primero
plainly had the right to plead and prosecute a claim not only for the reliefs specified by the Labor Code itself for
unlawful termination of employment, but also for moral or other damages under
the Civil Code arising from or connected with that termination of
employment.  And this was the state
of the law when he moved for the dismissal of his claims before the Labor
Arbiter, for reinstatement and recovery of back wages, so that he might later
file a damage suit “in a civil court which has exclusive jurisdiction over
his complaint ** founded on tortious acts, breach of
employment contract ** and consequent effects (thereof).”4

The legislative intent appears clear to allow recovery in
proceedings before Labor Arbiters of moral and other forms of damages in all
cases or matters arising from employer-employee relations.  This would no doubt include, particularly,
instances where an employee has been unlawfully dismissed.  In such a case the Labor Arbiter has
jurisdiction to award to the dismissed employee not only the reliefs specifically provided by labor laws, but
also moral and other forms of damages governed by the Civil Code.  Moral damages would be recoverable, for
example, where the dismissal of the employee was not only effected without
authorized cause and/or due process — for which relief is granted by the Labor
Code — but was attended by bad faith or fraud, or constituted an act
oppressive to labor, or was done in a manner contrary to morals, good customs
or public policy1
— for which which the obtainable relief is
determined by the Civil Code2 (not the Labor Code).  Stated otherwise, if the evidence adduced by
the employee before the Labor Arbiter should establish that the employer did
indeed terminate the employee’s services without just cause or without
according him due process, the Labor Arbiter’s judgment shall be for the
employer to reinstate the employee and pay him his back wages or,
exceptionally, for the employee simply to receive separation pay.  These are reliefs
explicitly prescribed by the Labor Code.3 But any award of moral damages by
the Labor Arbiter obviously cannot be based on the Labor Code but should
be grounded on the Civil Code. 
Such an award cannot be justified solely upon the premise (otherwise
sufficient for redress under the Labor Code) that the employer fired his
employee without just cause or due process. 
Additional facts must be pleaded and proven to warrant the grant of
moral damages under the Civil Code, these being, to repeat, that the act of
dismissal was attended by bad faith or fraud, or was oppressive to labor, or
done in a manner contrary to morals, good customs, or public policy; and, of
course, that social humiliation, wounded feelings, grave anxiety, etc.,
resulted therefrom.4

It is clear that the question of the legality of the act of
dismissal is intimately related to the issue of the legality of the
manner by which that act of dismissal was performed.  But while the Labor Code treats of the nature
of, and the remedy available as regards the first — the employee’s separation from
employment — it does not at all deal with the second — the manner of that
separation — which is governed exclusively by the Civil Code.  In addressing the first issue, the Labor
Arbiter applies the Labor Code; in addressing the second, the Civil Code.  And this appears to be the plain and patent
intendment of the law.  For apart from
the reliefs expressly set out in the Labor Code
flowing from illegal dismissal from employment, no other damages may be
awarded to an illegally dismissed employee other than those specified by the
Civil Code.  Hence, the fact that the
issue — of whether or not moral or other damages were suffered by an employee
and in the affirmative, the amount that should properly be awarded to him in
the circumstances — is determined under the provisions of the Civil Code and
not the Labor Code, obviously was not meant to create a cause of action
independent of that for illegal dismissal and thus place the matter beyond the
Labor Arbiter’s jurisdiction.

Thus, an employee who has been illegally dismissed (i.e.,
discharged without just cause or being accorded due process), in such a manner
as to cause him to suffer moral damages (as determined by the Civil Code), has
a cause of action for reinstatement and recovery of back wages and damages.  When he institutes proceedings before the
Labor Arbiter, he should make a claim for all said reliefs.  He cannot, to be sure, be permitted to
prosecute his claims piecemeal.  He
cannot institute proceedings separately and contemporaneously in a court of
justice upon the same cause of action or a part thereof.  He cannot and should not be allowed to sue in
two forums:  one, before the Labor
Arbiter for reinstatement and recovery of back wages, or for separation pay,
upon the theory that his dismissal was illegal; and two, before a court of
justice for recovery of moral and other damages, upon the theory that the
manner of his dismissal was unduly injurious, or tortious.  This is what in procedural law is known as
splitting causes of action, engendering multiplicity of actions.  It is against such mischiefs
that the Labor Code amendments just discussed are evidently directed, and it is
such duplicity which the Rules of Court regard as ground for abatement or
dismissal of actions, constituting either litis
pendentia (auter action
pendant) or res adjudicata,
as the case may be.1 But this was precisely what Primero’s counsel did. 
He split Primero’s cause of action; and he
made one of the split parts the subject of a cause of action before a court of
justice.  Consequently, the judgment of
the Labor Arbiter granting Primero separation pay
operated as a bar to his subsequent action for the recovery of damages before
the Court of First Instance under the doctrine of res
judicata. 
The rule is that the prior “judgment or order is, with respect to
the matter directly adjudged or as to any other matter that could have been
raised in relation thereto, conclusive between the parties and their
successors in interest by title subsequent to the commencement of the action or
special proceeding, litigating for the same thing and under the same title and
in the same capacity.”^[2]

We are not unmindful of our previous rulings on the matter cited
in the dissent to the decision of the Court of Appeals subject of the instant
petition,^[3]
notably, Quisaba v. Sta. Ines-Melale Veneer & Plywood, Inc., where a
distinction was drawn between the right of the employer to dismiss an employee,
which was declared to be within the competence of labor agencies to pass upon,
and the “manner in which the right was exercised and the effects flowing therefrom,” declared to be a matter cognizable only by
the regular courts because “intrinsically civil.”^[4]
We opine that it is this very distinction which the law has sought to eradicate
as being so tenuous and so difficult to observe,^[5]
and, of course, as herein pointed out, as giving rise to split jurisdiction, or
to multiplicity of actions, “a situation obnoxious to the orderly admlinistration of justice.”1
Actually we merely reiterate in this decision the doctrine already laid down in
other cases (Garcia v. Martinez, 84 SCRA, 577; Ebon v. de Guzman, 13 SCRA 52; Bengzon v. Inciong, 91 SCRA 248;
Pepsi-Cola Bottling Co. v. Martinez, 112 SCRA 578; Aguda
v. Vallejos, 113 SCRA 69; Getz v. C.A., 116 SCRA, 86;
Cardinal Industries v. Vallejos, 114 SCRA 471; Sagmit v. Sibulo, 133 SCRA 359)
to the effect that the grant of jurisdiction to the Labor Arbiter by Article
217 of the Labor code is sufficiently comprehensive to include claims for moral
and exemplary damages sought to be recovered from an employer by an employee
upon the theory of his illegal dismissal. 
Rulings to the contrary are deemed abandoned or modified accordingly.

WHEREFORE, the petition is DISMISSED, without
pronouncement as to costs.

Teehankee, C.J., Cruz, and Gancayco, JJ., concur.

Paras, J., designated a Special Member of the First Division.

^[1]
Set out in the judgment subject of petitioner’s present appeal, quoting and
sanctioning the narration of facts in Primero’s
brief, it being established rule that that Court’s findings are as a rule
conclusive, even on the Supreme Court

1
Rollo, p. 14; appellant’s brief in CA, p. 4;
emphasis supplied

2
R.A. 1052, as amended, then in force

1
Rollo, p. 91

2
ART. 217, PD 442, eff. May 1, 1974

3
Garcia v. Martinez, 84 SCRA 577; Ebon v. de Guzman, 113 SCREA 52;
see also, Bengzon v. Inciong,
91 SCRA 248; Pepsi-Cola Bottling Co. v. Martinez, 112 SCRA 578; Aguda v. Vallejos, 113
SCRA 69; Getz v. CA, 116 SDCRA 86; Cardinal Industries v. Vallejos, 114 SCRA 471; Sagmit v.
Sibulo, 133 SCRA 359

4
Italics supplied

5
SEE Footnote No. 1, supra

6
Atlas Fertilizer Corporation v. Hon. Navarro, G.R. No. 721074, April 30,
1987, citing National Federation of Labor v. Eisma,
127 SCRA 419, and Philippine American Management & Financing Co., Inc. v.
Management & Supervisors Association, etc., 48 SCRA 187

1 As amended, ART. 217 now provides that the original,
exclusive jurisdiction of labor arbiters includes cases “that workers
may file involving wages, hours of work, and other terms and conditions of
employment” and “all money claims of workers, including those based
on non-payment or underpayment of wages, overtime compensation, separation pay,
and other benefits provided by law or appropriate agreement, except claims for
employees’ compensation, social security, medicare
and maternity benefits.”

2 Quisaba v. Sta. Ines-Melale Veneer & Plywood Inc., 58 SCRA 771;
Calderon v. CA, 100 SCRA 459; Medina v. Castro-Bartolome, 116 SCRA 597; Singapore Airlines v. Pano, 122 SCRA 671; Molave Motor
Sales, Inc., v. Laron, 129 SCRA 485

3 Now Article 217, Labor Code

4 See Footnote 2, supra

1 Art. 1701, Civil Code, and Arts.
2219 (10) in relation to Art. 21 of the same Code

2 Arts. 2195-2235, Civil Code

3 Art. 280, to be precise

4 Barreto v. Arevalo, 99 Phil. 771;
Francisco v. GSIS, L-18155, March 30, 1963;
Parang v. Ty Belizar, L-19487, Jan. 31, 1967; Peo. v. Reyes, 103 SCRA 103

1 Sec. 1 (e), Rule 16, and Section 49 (b), Rule 39,
Rules of Court; SEE Bayang v. CA, 148 SCRA 91,
citing Urtula v. Republic, and Gamboa v. CA, 108 SCRA 1; see, also, cases collated
in Moran, Comments on the Rules, 1979 ed., vol. 1, page 485,
footnote 2, and vol. 2, page 351, footnote 1 and 2

^[2]
Sec. 49 (b), Rule 39;, emphasis supplied; SEE Mapa v.
Guanzon, 77 SCRA 398

^[3]
See footnote 3, page 4, supra

^[4]
58 SCRA 771, 774

^[5]
Atlas Fertilizer Corp. v. Hon. Navarro, G.R No. 721074, April 30, 1987,
citing National Federation of Labor v. Eisma,
127 SCRA 419

1 Gonzales v. Prov.
of Iloilo, 38 SCRA 209; Associated Labor Union v. Gomez, 19 SCRA 304;
Progressive Labor Association v. Atlas Consolidated Mining &
Development Corp., 33 SCRA 350; Cyphil Employees
Association-NATU v. Pharmaceutical Industries, Inc., 77 SCRA 135;
Calderon, Sr. v. C.A., 100 SCRA 459