G.R. No. 112940 Case Digest

G.R. No. 112940 November 21, 1994

Dai-Chi Electronics Manufacturing Corp.

vs Hon. Martin Villarama, Jr. and Adonis Limjuco

Ponente: Quiason

Facts:

July 1993, petitioner filed a complaint for damages with RTC Pasig against Limjuco, a former employee. Dai-Chi alleged that Limjuco violated their contract of employment. Dai-Chi claimed that Limjuco became an employee of Angel Sound Philippines Corp. engaged in the same business as Dai-Chi. Dai-Chi alleged also that Limjuco was the head of material management control department at the competing corporation while employed in Dai-Chi.

Dai-Chi sought to recover liquidated damages in the amount of 100,000 as provided in their contract. Then Judge Villarama, ruled that it had no jurisdiction over the subject matter of the controversy because the complaint is arising from employer-employee relations. Dai-Chi contends that the action did not arise from employer-employee relations, even though the claim is based on the employment contract.

Issue: Is petitioner's claim for damages one arising from employer-employee relations?

Ruling:

No. Petitioner does not ask for any relief under the Labor Code, it seeks to recover damages agreed upon in the contract as redress for private respondent’s breach of his contractual obligation to its "damage and prejudice".

On appeal to this court, we held that jurisdiction over the controversy belongs to the civil courts. We stated that the action was for breach of a contractual obligation, which is intrinsically a civil dispute. We further stated that while seemingly the cause of action arose from employer-employee relations, the employer's claim for damages is grounded on "wanton failure and refusal" without just cause to report to duty coupled with the averment that the employee "maliciously and with bad faith" violated the terms and conditions of the contract to the damage of the employer. Such averments removed the controversy from the coverage of the Labor Code of the Philippines and brought it within the purview of Civil Law.

Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to be cognizable by the Labor Arbiter, must have a reasonable causal connection with any of the claims provided for in that article. Only if there is such a connection with the other claims can the claim for damages be considered as arising from employer-employee relations.

Trial Court is ordered to continue with the proceedings.