G.R. No. 128024 May 9, 2000
Bebiano M. Bañez, petitioner, vs. Hon. Downey C. Valdevilla and Oro Marketing, Inc., respondents.

FACTS

Petitioner Bebiano M. Bañez was the sales operations manager of private respondent Oro Marketing, Inc. in Iligan City. In 1993, he was indefinitely suspended and subsequently filed a complaint for illegal dismissal with the National Labor Relations Commission (NLRC). The Labor Arbiter ruled in his favor, declaring the dismissal illegal and awarding separation pay, backwages, and attorney’s fees. This decision became final after the NLRC dismissed the company’s appeal for being filed out of time and the Supreme Court dismissed a subsequent petition.
Thereafter, Oro Marketing filed a complaint for damages against Bañez before the Regional Trial Court (RTC) of Misamis Oriental. The complaint alleged that Bañez, while employed, engaged in a scheme where he would purchase company items at ex-factory prices and then sell them to customers as installment sales using the company’s name and facilities, thereby diverting profits and causing business losses. Bañez moved to dismiss the complaint, arguing that the claim for damages arose from employer-employee relations and thus fell under the exclusive original jurisdiction of the NLRC.

ISSUE

Whether the Regional Trial Court has jurisdiction over the complaint for damages filed by Oro Marketing against its former employee, Bebiano M. Bañez.

RULING

No. The Supreme Court granted the petition and dismissed the civil case for lack of jurisdiction. The Court held that the claim for damages filed by Oro Marketing is within the exclusive original jurisdiction of the Labor Arbiter under Article 217(a)(4) of the Labor Code, as amended. This provision grants Labor Arbiters jurisdiction over “[c]laims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations.”
The Court emphasized that the determination of jurisdiction is conferred by law and is based on the allegations in the complaint. A scrutiny of Oro Marketing’s complaint reveals that the cause of action is intrinsically linked to the employer-employee relationship. The alleged fraudulent acts were committed by Bañez in his capacity as the company’s Sales Operations Manager, utilizing his position, the company’s facilities, and its manpower. The claim for loss of profits and other damages is a direct consequence of the alleged breach of his duties as an employee. Therefore, the damages claimed clearly “arose from” the employer-employee relation. The RTC’s assertion of jurisdiction, based on its characterization of the action as a breach of contractual obligation under civil law, constituted grave abuse of discretion. The case was remanded for referral to the proper labor tribunal.