505 Phil. 468
Claims for moral and exemplary damages arising from employer-employee relations fall within the original and exclusive jurisdiction of the National Labor Relations Commission, not the regular courts. Hence, in the present case, the trial court should not have entertained the Complaint filed by respondent for damages arising from the alleged oppressive manner of his dismissal by petitioners.
Before the Court is a Petition for Review
under Rule 45 of the Rules of Court, seeking to reverse and set aside the March 31, 2003 Decision
of the Court of Appeals (CA) in CA-GR SP No. 74278 and its August 5, 2003 Resolution
denying petitioners' Motion for Reconsideration. The assailed CA Decision disposed as follows:
"WHEREFORE, for lack of merit, the petition is DISMISSED."
The antecedents were summarized by the CA as follows:
"Petitioners are members of the Board of Directors of Philippine Postal Savings Bank, Inc. (PPSBI) at Liwasang Bonifacio, Manila; private respondent Antonio L. Aguilar was employed as Vice President of its Finance and Administrative Group from February 14, 2000 to January 31, 2001, and thereafter as Compliance Officer until September 26, 2001 when his services were terminated.
"On October 25, 2001, private respondent filed a complaint against petitioners with the Regional Trial Court, Branch 49, City of Manila alleging that he was illegally dismissed by the petitioners in an oppressive way; that the cause of his dismissal was his principled act of exposing anomalies in the bank; that considering the seriousness of the violations of internal control and bank policies, there is a need to prohibit petitioners from performing their functions as members of the Board in their own personal capacity. He prayed for the award of damages, the issuance of a temporary restraining order enjoining the petitioners from dismissing him or in the alternative, to immediately reinstate him, and the prohibition of the petitioners from performing their personal and official acts in the bank.
"On October 29, 2001, public respondent Judge motu proprio dismissed the complaint for lack of jurisdiction stating that jurisdiction over the case lies with the Labor Arbiter of the National Labor Relations Commission.
"Unaware of the dismissal[,] petitioners, on November 9, 2001, filed a Motion to Dismiss private respondent's complaint on the ground of the RTC's lack of jurisdiction over the subject matter of the complaint.
"On November 12, 2001, private respondent filed a Motion for Reconsideration of the Order dated 29 October 2001. However, on November 26, 2001, he filed an Ex-Parte Motion to Withdraw Motion For Reconsideration of the Dismissal Order and In Lieu Thereof to Submit Amended Complaint, which was attached thereto. In his Amended Complaint, he emphasized that his dismissal (constructive and actual) was done in a very oppressive manner. His prayer for reinstatement was deleted.
"In an Order dated January 4, 2002, public respondent Judge admitted the Amended Complaint reasoning that amendment was a matter of right before defendants filed a responsive pleading, the motion to dismiss not being a responsive pleading. Petitioners were ordered to file their Answer within fifteen (15) days from receipt thereof.
"On January 30, 2002, without filing a Motion for Reconsideration of the above Order, petitioners again filed a Motion to Dismiss, this time of the Amended Complaint, on the ground of lack of jurisdiction over the persons of the petitioners and over the subject matter of the claim.
"In an Order dated February 8, 2002, public respondent Judge ruled that petitioners' filing of the above Motion to Dismiss was tantamount to a voluntary appearance through a pleading that vested the court with jurisdiction over their persons. Petitioners were given an additional ten (10) days within which to submit an Answer, "otherwise, said defendants (herein petitioners), may be declared in default."
"Petitioners then filed a Motion for Reconsideration dated February 15, 2002, reiterating their prayer for the dismissal of the Amended Complaint. This was denied in the Order dated March 1, 2002.
"On April 4, 2002, respondent filed a Motion to Declare Defendants As in Default and For Judgment On the Pleadings grounded on petitioners' failure to file their Answer within the additional ten (10)-day period granted by the court. Citing Ortigas & Co. Ltd. v. Velasco (254 SCRA 234), public respondent noted that "defendants were heedless and unyielding to the Orders of the Court particularly its directive to file an Answer to the Amended Complaint and that the defendants continually ignored and refused to submit to the Orders of the Court, and inasmuch as no responsive pleading has been filed by them within the period fixed by the Court' in its Order dated June 7, 2002 which granted respondent's motion and declared defendants-petitioners in default.
"On the 15th day from receipt thereof on June 19, 2002, petitioners filed on July 1, 2002 an ordinary Motion for Reconsideration on the above Order, (not a Motion to Set Aside the Order of Default under Rule 9 Sec. 3(b), Rules of Civil Procedure) which was denied in an Order dated July 19, 2002.
"On the same date of July 19, 2002, public respondent issued the assailed decision (Judgment by Default) in favor of the private respondent ratiocinating as follows:
"The Court shall not delve into the legality of Mr. Aguilar's demotion and, later on, dismissal by the PPSB Board of Directors for to do so would intrude into the jurisdiction of the Labor Arbiters of the National Labor Relations Commission. Rather, this Court shall concern itself with the manner in which the said demotion and dismissal were carried out and the consequent effects thereof, which, as jurisprudence teaches us, are well within this Court's jurisdiction to inquire into."On August 7, 2002, petitioners filed an Omnibus Motion contending that the Order of Default did not deprive them of their right to notice, which public respondent violated when private respondent's evidence was received without notifying them; that the presentation of evidence ex parte was premature considering that they were still entitled to question the propriety of the Order of Default and that, in fact, they filed a motion for reconsideration of the Order of default. Petitioners reiterated that the Amended Complaint was filed out of time considering that the Order of Dismissal dated 29 October 2001 had already became final. On August 16, 2002, the public respondent issued the assailed Order denying the Omnibus Motion."
"From the foregoing, confluence of events, which stand unrebutted the defendants having been declared in default, there can be no question that Mr. Aguilar's demotion and dismissal from service was pursued in a highly abusive, oppressive and clearly anti-social manner."
Petitioners filed before the CA a Petition for Certiorari under Rule 65, challenging the July 19, 2002 Decision and the August 16, 2002 Order of the Regional Trial Court (RTC), alleging that it had gravely abused its discretion in the following ways:
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Holding that Mr. Aguilar's ex parte withdrawal of his Motion for Reconsideration of the Order of Dismissal did not cause it to become final and executory.
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Taking cognizance of the Amended Complaint because [private respondent] had deleted his prayers for the other reliefs that fall within the jurisdiction of the labor court.
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| ||"3. || Declaring [petitioners] in default and in allowing the presentation of and receiving [private respondent's] evidence ex parte in violation of the Rules." |
Petitioners prayed that "the lower court's judgment by default, as well as said court's all other orders and findings after its Order of dismissal of the original Complaint[,] be reversed and set aside, and that the case in question be dismissed for lack of jurisdiction and for having been decided in violation of the Rules."
Ruling of the Court of Appeals
Agreeing with the RTC, the CA held that the withdrawal of the Motion for Reconsideration filed by respondent had not resulted in the finality of the Dismissal Order dated October 29, 2001, since he had simultaneously amended his Complaint. This he had every right to do, said the CA, because no responsive pleading had yet been filed by petitioners. It opined that the Amended Complaint superseded his original Complaint and mooted the issue raised in his Motion for Reconsideration. It further said that the rules on the amendment of pleadings may be liberally construed to avoid a multiplicity of suits; and to ensure that the real controversies between the parties would be presented, their rights determined, and the case decided on the merits without unnecessary delay.
The CA likewise ruled that the RTC had jurisdiction over the case, because of the civil nature of the cause of action; that is, the alleged oppressive manner of respondent's dismissal that had resulted in damages.
Lastly, the CA found no grave abuse of discretion on the part of the RTC in declaring petitioners in default, then afterwards receiving ex parte
the evidence presented by respondent, and rendering a judgment of default. The appellate court stressed that as early as the January 4, 2002 Order, the RTC had directed petitioners to answer the Amended Complaint. The trial court reiterated the directive in the February 8, 2002 Order, with a warning that if they failed to answer within ten days, they would be declared in default.
The two Orders, which petitioners had not challenged either by a motion for reconsideration or by a petition for certiorari, thus attained finality. According to the CA, their prayer for the dismissal of the Amended Complaint was reiterated in both their Omnibus Motion filed after the denial on January 30, 2002, of their Motion to Dismiss the Amended Complaint, as well as in their subsequent Motions for Reconsideration. These amounted to multiple motions for reconsideration, which are proscribed under Section 5 of Rule 37 of the Rules of Civil Procedure.
As to the ex parte
reception of respondent's evidence, the CA pointed out that under Section 3 of Rule 9, the court may proceed to render judgment based entirely on the plaintiff's Complaint without need of receiving evidence. If so, the appellate court said, it would be reasonable to conclude that petitioners did not have any demandable right to be given notice of the ex parte
reception of respondent's evidence.
Hence, this Petition.
Petitioners raise the following issues for our consideration:
The Honorable Court of Appeals erred in sustaining the finding of the trial court that Mr. Aguilar's ex parte withdrawal of his Motion for Reconsideration of the Order of dismissal of the original Complaint did not cause said Order to become final and executory.
The Honorable Court of Appeals erred in sustaining the trial court that it could allow the amendment of the original Complaint purely as a matter of right before a responsive pleading is filed, despite prevailing jurisprudence to the contrary.
The Honorable Court of Appeals erred in sustaining that the trial court could take cognizance of Mr. Aguilar's Amended Complaint because it had deleted the prayers for other reliefs that fall within the jurisdiction of the National Labor Relations Commission.
The Honorable Court of Appeals erred in sustaining the trial court that it could receive Mr. Aguilar's evidence ex parte without notice to petitioners despite pertinent rules and jurisprudence to the contrary."
In brief, the issues are as follows: (1) What are the effects of the withdrawal of the Motion for Reconsideration of the RTC's dismissal of the Complaint? (2) Did the RTC have jurisdiction over the Amended Complaint?
The Court's Ruling
The Petition is meritorious.
Withdrawal of the Motion for Reconsideration
It is settled that an amendment of a complaint may be allowed even if an order for its dismissal has been issued, as long as the motion to amend is filed before the dismissal order becomes final.
The reason for allowing the amendment on this condition is that, upon finality of the dismissal, the court loses jurisdiction and control over the complaint. Thus, it can no longer make any disposition on the complaint in a manner inconsistent with the dismissal.
After the order of dismissal without
prejudice becomes final, and therefore falls outside the court's power to modify, a party who wishes to reinstate the case has no remedy other than to file a new complaint.
The instant case deals with a Motion for Reconsideration
of the trial court's Order dismissing the case for lack of jurisdiction. The Motion was filed on November 13, 2001, within the 15-day reglementary period for appeal,
and later withdrawn and substituted with a Motion to Admit Amended Complaint. Petitioners' contention is that the withdrawal of the Motion for Reconsideration would have a retroactive effect, such that it would be as if no motion had been filed at all; and, hence, the Motion for Admission of the Amended Complaint -- filed beyond the 15-day reglementary period, after the dismissal had become final -- should no longer be entertained, much less admitted.
The trial court accepted the Amended Complaint and held that the dismissal Order had not attained finality, because the 15-day reglementary period under the Rules had tolled upon the filing of the Motion for Reconsideration; and would begin to run again only after the party concerned would have received the court's Resolution on the Motion.
As it had not yet ruled on the Motion for Reconsideration when respondent filed his Amended Complaint, the trial court opined that the Amended Complaint may be deemed to have been filed within the prescribed time.
We rule otherwise. The trial court erroneously admitted the Amended Complaint. Upon the withdrawal by respondent of his Motion for Reconsideration, it was as if no motion had been filed. Hence, the Order of the trial court under question became final and executory 15 days from notice by the party concerned.
In the same manner that the withdrawal of an appeal has the effect of rendering the appealed decision
final and executory, the withdrawal of the Motion for Reconsideration in the present case had the effect of rendering the dismissal Order final and executory. By then, there was no more complaint that could be amended, even for the first time as a matter of right.
Notably, respondent does not refute petitioners' argument that his Motion for Admission of his Amended Complaint was filed after the lapse of the 15-day reglementary period to reconsider or set aside the dismissal. What he insists upon is his contention that the Order of dismissal did not become final and executory, because the Motion for Reconsideration had not yet been resolved at the time he filed his Amended Complaint.
By way of analogy, petitioners cite Olympia International v. Court of Appeals
in which the plaintiff's two civil actions were dismissed by the trial court on a joint Motion to Dismiss filed by the plaintiff and the defendant:
"It is equally important to note that the right to file a new action in this case has long prescribed, for while the commencement of a civil action stops the running of the statute of prescription or limitations, its dismissal or voluntary abandonment by the plaintiff leaves the parties in exactly the same position as though no action had been commenced at all. The commencement of an action, by reason of its dismissal or abandonment, takes no time out of the period of prescription."
In like manner, while the filing of the Motion for Reconsideration interrupted the running of the 15-day reglementary period, its withdrawal left respondent in exactly the same position as though no motion had been filed at all. The withdrawal of the Motion for Reconsideration effectively erased the tolling of the reglementary period to amend the Complaint.
Under Article 217(a) of the Labor Code, as amended by Republic Act No. 6715 which took effect on March 21, 1989, labor arbiters shall have "original and exclusive jurisdiction to hear and decide: [c]laims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations x x x."
Clearly, in the case before us, respondent's claim for damages against petitioners arose from a prior employer-employee relationship. The averments in the Complaint indisputably show that his claim for damages was anchored on and was a consequence of the termination of his employment with PPSBI.
Indeed, the trial court initially made this observation when it dismissed motu proprio
It ruled "that the manner in which the dismissal was implemented was anti-social, oppressive and in disregard of procedural due process x x x is but an incident part and parcel of the main issue which is the alleged illegal dismissal of [respondent]." The trial court likewise opined that the plea of respondent for reinstatement made his case one of illegal dismissal per se.
Later, however, it reversed its dismissal Order after he subsequently amended his Complaint by deleting his prayer for reinstatement and by stressing that his claim for damages had resulted from the alleged oppressive manner of his dismissal.
The trial court should have dismissed the Amended Complaint. With regard to claims for damages under paragraph 4 of Article 217, quoted above, jurisprudence has applied the "reasonable connection rule": if there is a reasonable causal connection between the claim asserted and the employer-employee relations, then the case falls within the jurisdiction of the labor arbiter.
We do not agree with the trial court that the case became a civil dispute simply because respondent had not asked for reinstatement in his Amended Complaint. An employee need not seek reinstatement in order to have a complaint heard by the labor arbiter.
A comparison of the original
and the Amended Complaint
reveals that the allegations and the prayers in both are almost identical, except that the prayer for reinstatement and the claim for salary increases and allowances are no longer included in the Amended Complaint. These are telltale signs that the claim of respondent for damages is intertwined with his separation from his employment, allegedly without a just cause. Consequently, his claim has a reasonable causal connection with his employer-employee relations with the bank.
The Court is aware that the Civil Code provisions on human relations and damages may be used as bases for justifying his claim. But, the fact remains: the present action primarily
involves an employer-employee relationship. The damages he incurred are mere consequences of the alleged injury brought about by his perceived illegal dismissal. The civil ramifications of his actual claim cannot alter the reality that it is primordially a labor matter cognizable by the labor tribunals.
Under Article 217 (a) of the Labor Code, the labor arbiter has the jurisdiction to award to a dismissed employee not only the reliefs provided by the Labor Code, but also moral and other forms of damages governed by the Civil Code.
Although a dismissal from employment may be a violation not only of the Labor but also of the Civil Code,
an illegally dismissed employee has only a single cause of action.
Moral damages are recoverable when, for example, the dismissal was effected without an authorized cause and/or due process -- for which relief is granted by the Labor Code -- and also when the dismissal (1) was attended by bad faith or fraud; (2) constituted an act oppressive to labor; or (3) was done in a manner contrary to morals, good customs or public policy. For any of these, the obtainable relief is determined by the Civil Code.
This Court expounded on this matter in the earlier case Primero v. Intermediate Appellate Court
which we quote:
"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."
Hence, for a single cause of action, the dismissed employee cannot 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 the dismissal was illegal; and two
, before a court of justice for recovery of moral and other damages, upon the theory that the manner of dismissal was unduly injurious or tortious. Suing in the manner described is known as "splitting a cause of action," a practice engendering a multiplicity of actions. It is considered procedurally unsound and obnoxious to the orderly administration of justice.
Splitting a cause of action was precisely what private respondent did in filing the Amended Complaint. He split his cause of action, then made one of the split parts the subject of his Amended Complaint before a court of justice.
Precisely, such duplicity prodded the lawmakers to amend the Labor Code by restoring to the labor arbiters the jurisdiction over claims for damages of this nature. From 1979 to 1980, jurisdiction over employment-predicated actions for damages vacillated from labor tribunals to regular courts, and back to labor tribunals.
On May 1, 1979, Presidential Decree No. 1367 amended the then existing Article 217
of the Labor Code to the effect that "[r]egional Directors shall not indorse and Labor Arbiters shall not entertain claims for moral or other forms of damages."
But this limitation of jurisdiction did not last long, because on May 1, 1980, PD 1691
nullified PD 1367 and restored Article 217 of the Labor Code almost to its original form. PD 1691 once again vested in the labor arbiters and the NLRC the jurisdiction over all money claims of workers and all other claims arising from employer-employee relations, including moral and exemplary damages.
In Ebon v. De Guzman
this Court explained:
"The lawmaker in divesting the Labor Arbiters and the NLRC of jurisdiction to award moral and other forms of damages in labor cases could have assumed that the Labor Arbiters' position-paper procedure of ascertaining the facts in dispute might not be an adequate tool for arriving at a just and accurate assessment of damages, as distinguished from backwages and separation pay, and that the trial procedure in the Court of First Instance [now Regional Trial Court] would be a more effective means of determining such damages. x x x
"Evidently, the lawmaking authority had second thoughts about depriving the Labor Arbiters and the NLRC of the jurisdiction to award damages in labor cases because that set up would mean duplicity of suits, splitting the cause of action and possible conflicting findings and conclusions by two tribunals on one and the same claim."
Presently, as amended by RA 6715, the jurisdiction of the NLRC under Article 217 of the Labor Code is comprehensive enough to include claims for all forms of damages arising from the employer-employee relations.
WHEREFORE, the Petition is GRANTED
, and the assailed Decision REVERSED
and SET ASIDE
. The Amended Complaint in Civil Case No. 01102147, filed with the Regional Trial Court (Branch 49) of the City of Manila, is hereby DISMISSED
. No pronouncement as to costs.
SO ORDERED.Sandoval-Gutierrez, Corona, Carpio Morales,
and Garcia, JJ.,
Rollo, pp. 20-47.
Annex "A" of Petition, id., pp. 49-59. Penned by Justice Portia Aliño-Hormachuelos (Division chair) and concurred in by Justices Edgardo P. Cruz and Noel G. Tijam (members).
Annex "B" of Petition, id., pp. 61-62.
CA Decision, p. 11; id., p. 58.
CA Decision, pp. 2-7; id., pp. 50-54. See
Annex "T" of Petition ("Memorandum"), pp. 5-6; id., pp. 139-140.
Id., pp. 8 & 142.
This case was deemed submitted for decision on September 30, 2004, upon this Court's receipt of respondent's Memorandum, signed by Atty. Larry M. Villabroza. Petitioners' Memorandum, signed by Atty. Oscar A. Longalong, was received by this Court on August 6, 2004.
Petitioner's Memorandum, pp. 8-9; rollo, pp. 228-229. Original in uppercase. Dauden-Hernaez v. Hon. De los Angeles
, 137 Phil. 900, April 30, 1969; Constantino v. Reyes
, 8 SCRA 379, June 29, 1963; Paeste and Carpio v. Jaurigue
, 94 Phil. 179, December 29, 1953. Bañares II v. Balising
, 328 SCRA 36, March 13, 2000 (citing Ortigas & Company Limited Partnership v. Velasco
, 234 SCRA 455, July 25, 1994.) Bañares II v. Balising
, 328 SCRA 36, March 13, 2000.
Annex "F" of Petition; rollo, pp. 81-85.
§2, Rule 40. See
the Order dated July 19, 2002; rollo, pp. 119-121. See Development Bank of the Philippines v. Pingol Land Transport System Company, Inc.
, 420 SCRA 652, 659, January 22, 2004.
180 SCRA 353, December 20, 1989.
Id., p. 363, per Fernan, CJ
Annex "E" of Petition; Order dated October 29, 2001; id., pp. 78-80. Eviota v. Court of Appeals
, 407 SCRA 394, July 29, 2003; San Miguel Corporation v. Etcuban
, 319 SCRA 704, December 3, 1999; De Guzman v. NLRC
, 253 SCRA 46, February 1, 1996; Planters Products, Inc. v. NLRC
, 169 SCRA 328, January 20, 1989; San Miguel Corporation v. NLRC
, 161 SCRA 719, May 31, 1988. Encarnacion v. Dynasty Amusement Center Corporation
, 213 SCRA 248, September 2, 1992; see also Planters Products, Inc. v. NLRC
Annex "C" of Petition; rollo, pp. 63-73.
Annex "G-2" of Petition; id., pp. 88-98. Bañez v. Valdevilla
, 331 SCRA 584, May 9, 2000. Associated Citizens Bank v. Japson
, 196 SCRA 404, April 30, 1991. Quijano v. Mercury Drug Corporation
, 292 SCRA 109, July 8, 1998; Suario v. Bank of the Philippine Islands
, 176 SCRA 688, August 25, 1989 (citing Primero v. IAC
, 156 SCRA 435, December 14, 1987).
Ibid., pp. 444-445, per Narvasa, J
Article 217 of the Labor Code as it existed prior to May 1, 1978 provided as follows:
"Art. 217. Jurisdiction of Labor Arbiters and the Commission. - (a) The Labor Arbiters shall have exclusive jurisdiction to hear and decide the following cases involving all workers, whether agricultural or non-agricultural: Suario v. Bank of the Philippine Islands
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Unfair labor practice cases;
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Unresolved issues in collective bargaining including those which involve wages, hours of work, and other terms and conditions of employment duly indorsed by the Bureau in accordance with the provisions of this Code;
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All money claims of workers involving non-payment or underpayment of wages, overtime or premium compensation, maternity or service incentive leave, separation pay and other money claims arising from employer-employee relation, except claims for employee's compensation, social security and medicare benefits and as otherwise provided in Article 128 of this Code;
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Cases involving household services; and
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All other cases arising from employer-employee relation unless expressly excluded by this Code.
x x x x x x x x x."
, 176 SCRA 688, 694, August 25, 1989, per Gutierrez Jr., J.; Aguda v. Vallejos
, 113 SCRA 69; March 26, 1982; Ebon v. De Guzman
, 113 SCRA 52, March 25, 1982.
Art. 217. Jurisdiction of the Labor Arbiter and the Commission
. - a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide the following cases involving all workers whether agricultural or non-agricultural:
x x x x x x x x x University of Santo Tomas v. Court of Appeals
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All money claims of workers, including those based on non-payment and underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employee compensation, social security, medicare and maternity benefits;
x x x x x x x x x
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All other claims arising from employer-employee relation, unless expressly excluded by this Code."
, 440 SCRA 356, October 18, 2004; Aguda v. Vallejos
Supra, p. 56, per Aquino, J