THIRD DIVISION
RONILO SORREDA, G.R. No. 172927
Petitioner,
Present:
CORONA, J., Chairperson,
VELASCO,
JR.,
- v e r s u s - NACHURA,
PERALTA
and
MENDOZA, JJ.
CAMBRIDGE
ELECTRONICS
CORPORATION,[1]
Respondent. Promulgated:
February
11, 2010
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D E C I S
I O N
CORONA, J.:
This petition[2] seeks to
reverse and set aside the May 26, 2005 decision[3] of the
Court of Appeals (CA) in CA-G.R. SP No. 77303 and its resolution denying
reconsideration.[4]
The CA affirmed the resolution[5] of the
National Labor Relations Commission (NLRC) in NLRC
NCR CA No. 028156-01 declaring that petitioner Ronilo
Sorreda was not a regular employee of respondent Cambridge Electronics Corporation.
On
May 8, 1999, petitioner was hired by respondent as a technician for a period of
5 months at minimum wage.[6] Five
weeks into the job (on June 15, 1999), petitioner met an accident in which his
left arm was crushed by a machine and had to be amputated.[7]
Petitioner
claimed that, shortly after his release from the hospital, officers of
respondent company called him to a meeting with his common-law wife, father and
cousin. There he was assured a place in the company as a regular employee for
as long as the company existed and as soon as he fully recovered from his
injury.
In
September 1999, after he recovered from his injury, petitioner reported for
work. Instead of giving him employment, they made him sign a memorandum of
resignation to formalize his separation from the company in the light of the
expiration of his five-month contract.
On
November 16, 1999, petitioner filed in the Regional Arbitration Branch of the
NLRC of Dasmariñas, Cavite a complaint[8] for
illegal dismissal (later changed to breach of contract). In his position paper,
he raised the following issues:
1.
whether there was
a valid agreement or contract of perpetual employment perfected between the
parties concerned;
2.
whether respondent
corporation was bound thereby and
3.
whether
[petitioner] has a cause of action for damages against respondent based on the
contract.[9]
He claimed that respondent failed to
comply with the terms of the contract of perpetual employment which was
perfected in June 1999 when he was called to a meeting by management.[10] He
prayed that respondent be made to pay compensatory,[11] moral[12] and
exemplary damages and attorney’s fees for default or breach of contract.
Respondent
denied that it extended regular employment to petitioner. Only words of
encouragement were offered but not perpetual employment. Moreover, it assailed
the labor arbiter’s jurisdiction over the case, claiming a lack of causal connection
between the alleged breach of contract and their employer-employee
relationship.
The
labor arbiter held that he had jurisdiction to hear and decide the case as it
involved the employer-employee relationship of the contending parties. He ruled
that petitioner who had been employed on a per-project basis became a regular
employee by virtue of the contract of perpetual employment. He stated that the
positive declaration of the witnesses (common-law wife, father and cousin)
present at the meeting and the parole evidence rule was enough to support the
petitioner’s claim. Thus, in a decision dated March 9, 2001, the labor arbiter
ruled that petitioner was employed by respondent for an indefinite period of
employment (that is, on regular status.) He ordered petitioner’s reinstatement
and the payment of backwages, moral damages and exemplary damages as well as
attorney’s fees.[13]
Both petitioner and respondent
appealed to the NLRC. Petitioner claimed that the labor arbiter erred in
finding that he was a regular employee, that the case was based on illegal
dismissal and that reinstatement and payment of backwages were the proper
reliefs. Respondent, on the other hand, asked for the reversal of the labor
arbiter’s decision based on grave abuse of discretion for assuming jurisdiction
over the case.
The NLRC agreed with respondent.[14] It
found that petitioner was not a regular employee; thus, he was neither
illegally dismissed nor entitled to reinstatement and backwages. Petitioner
sued for compensatory damages because of the accident that befell him. As the
contract for per-project employment had already expired, the issue no longer
fell under the jurisdiction of the labor arbiter and NLRC. Moreover, the testimonies
of petitioner’s witnesses were declared self-serving and thus insufficient to prove
the contract of perpetual employment. The motion for reconsideration of petitioner
was denied.[15]
Aggrieved, petitioner filed a petition
for certiorari[16]
in the CA questioning the NLRC’s finding of non-existence of the contract of
perpetual employment.
The CA dismissed the petition for lack
of merit, stating that the labor arbiter decided the case on an issue that was
never raised (i.e., the employment status of petitioner). Moreover,
petitioner’s principal cause of action, breach of contract, was not cognizable
by the labor courts but by the regular courts.[17] The CA
concluded that the NLRC did not commit any reversible error in finding that the
labor arbiter had no jurisdiction over the case. Furthermore, petitioner failed
to prove grave abuse of discretion in the NLRC’s exercise of its quasi-judicial
function.
Petitioner moved for reconsideration
but the motion was denied.[18] Thus,
this petition.
We affirm the Court of Appeals.
This case rests on the issue of whether the
labor arbiter had the jurisdiction to take cognizance thereof.
Jurisdiction over the subject matter
of a complaint is determined by the allegations of the complaint.[19] In Pioneer
Concrete Philippines, Inc. v. Todaro,[20] the
Court reiterated that where no employer-employee relationship exists between
the parties, and the Labor Code or any labor statute or collective bargaining
agreement is not needed to resolve any issue raised by them, it is the Regional
Trial Court which has jurisdiction. Thus it has been consistently held that the
determination of the existence of a contract as well as the payment of damages
is inherently civil in nature.[21] A labor
arbiter may only take cognizance of a case and award damages where the claim
for such damages arises out of an employer-employee relationship.[22]
In this instance, petitioner, from the
period May 8, 1999 to October 8, 1999, was clearly a per-project employee of
private respondent, resulting in an employer-employee relationship.
Consequently, questions or disputes arising out of this relationship fell under
the jurisdiction of the labor arbiter.
However, based on petitioner’s
allegations in his position paper, his cause of action was based on an alleged
second contract of employment separate and distinct from the per-project
employment contract. Thus, petitioner insisted that there was a perfected
contract of perpetual employment and that respondent was liable to pay him
damages.
We note, however, that petitioner filed
the case only when respondent refused to rehire him.[23]
While there was an employer-employee
relationship between the parties under their five-month per-project contract of
employment, the present dispute is neither rooted in the aforestated contract
nor is it one inherently linked to it. Petitioner insists on a right to be
employed again in respondent company and seeks a determination of the existence
of a new and separate contract that established that right. As such, his case
is within the jurisdiction not of the labor arbiter but of the regular courts. The NLRC and the CA were therefore correct in
ruling that the labor arbiter erroneously took cognizance of the case.
Even assuming arguendo that the
labor arbiter had the jurisdiction to decide the case, the Court cannot
countenance petitioner’s claim that a contract of perpetual employment was ever
constituted. While the Constitution recognizes the primacy of labor, it also
recognizes the critical role of private enterprise in nation-building and the
prerogatives of management. A contract of perpetual employment deprives
management of its prerogative to decide whom to hire, fire and promote, and
renders inutile the basic precepts of labor relations. While management may
validly waive it prerogatives, such waiver should not be contrary to law,
public order, public policy, morals or good customs.[24] An absolute and unqualified employment for life in
the mold of petitioner’s concept of perpetual employment is contrary to public
policy and good customs, as it unjustly forbids the employer from terminating
the services of an employee despite the existence of a just or valid cause. It
likewise compels the employer to retain an employee despite the attainment of
the statutory retirement age, even if the employee has became a “non-performing
asset” or, worse, a liability to the employer.
Moreover, aside from the self-serving
claim of petitioner, there was no concrete proof to establish the existence of such
agreement. Petitioner cannot validly force respondent to enter into a permanent
employment contract with him. Such stance is contrary to the consensuality
principle of contracts as well as to the management prerogative of respondent
company to choose its employees.
WHEREFORE, the petition is
hereby DENIED.
Costs against petitioner.
SO ORDERED.
Associate Justice
Chairperson
WE CONCUR:
Associate Justice Associate Justice
DIOSDADO M.
PERALTA JOSE C. MENDOZA
Associate Justice Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
RENATO C. CORONA
Associate Justice
Chairperson
Pursuant to Section 13, Article VIII of
the Constitution, I certify that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
Chief Justice
[1] The National Labor Relations Commission was impleaded as respondent but was excluded by the Court pursuant to Section 4, Rule 45 of the Rules of Court.
[2] Under Rule 45 of the Rules of Court.
[3] Penned by Associate Justice Amelita G. Tolentino and concurred in by Associate Justices Roberto A. Barrios (deceased) and Vicente S.E. Veloso of the Ninth Division of the Court of Appeals. Rollo, pp. 219-231.
[4] Dated October 7, 2005. Id., pp. 238-239.
[5] Dated June 26, 2002 and penned by Commissioner Amelia A. Gacutan and concurred in by Presiding Commissioner Roy N. Señeres and Commissioner Victoriano R. Calaycay. Id., pp. 170-183.
[6] Contract of Employment for Specific Project or Undertaking. Id., p. 135.
[7] Costs of the operation were borne by respondent.
[8] Docketed as NLRC RAB-IV-1-11869-00-C, rollo, pp. 136.
[9] Id., p. 138.
[10] Pertinent portion of the Position Paper stated:
“When complainant finally saw that respondent had no intention of making good on their earlier agreement or understanding, and re-employing him again as a worker, he filed his complaint with the Department of Labor and Employment. Hence, the instant case.” (emphasis supplied)
Id.
[11] P1,053,000, id., p. 6.
[12] P200,000, id.
[13] Id., p. 169.
[14] Docketed as NLRC NCR CA No. 028156-01, Id., pp. 170-183.
[15] Dated December 11, 2002.
[16] Under Rule 65 of the Rules of Court. Docketed as CA-G.R. SP. No. 77303.
[17] The CA stated:
The petitioner did not ask for any relief under the Labor Code. He sought to recover damages under the alleged JUNE CONTRACT as a redress for the private respondent’s breach of its contractual obligation to his prejudice. Indeed, the public respondent has no jurisdiction over the complaint. Thus whether or not an enforceable contract, albeit implied and innominate, had arisen between the respondent corporation and the petitioner under the circumstances of this case, and if so, whether or not it had been breached, are preeminently legal questions, questions not to be resolved by referring to labor legislation, having nothing to do with wages or other terms and conditions of employment, but rather having recourse to our law on contracts.
[18] Supra, note 4.
[19] San Miguel Corp. v. NLRC, G.R. No. 108001, 15 March 1996, 325 Phil. 401, 414.
[20] G.R. No. 154830, 8 June 2007, 524 SCRA 153, 163.
[21] Dai-chi Electronics Manufacturing Corporation v. Villarama, G.R. No. 112940, 21 November 1994; Yusen Air and Sea Serivce Philippines, Inc. v. Villamor, G.R. No. 154060, 16 August 2005, 467 SCRA 167, 172.
[22] Article 217(a) Labor Code of the Philippines provides:
(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original jurisdiction to hear and decide within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenograpghic notes, the following cases involving all workers, whether agricultural or non-agricultural:
xxx
(1) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
xxx (emphasis supplied)
[23] See note 11.
[24] See Article 6, New Civil Code.