G.R. No. L-11945; August 18, 1958
REYNALDO GOMEZ, plaintiff-appellant, vs. NORTH CAMARINES LUMBER COMPANY, INC., defendant-appellee.

FACTS

Reynaldo Gomez was employed as an oiler aboard the M/V Vega, owned by North Camarines Lumber Co. Inc., from July 3, 1954, to September 30, 1955. On December 29, 1955, he filed a complaint with Regional Office No. 1 of the Department of Labor for unpaid overtime services, underpayment, and separation pay. During the investigation, Gomez confined his claim to separation pay only. The Investigator dismissed the complaint for lack of merit on April 5, 1956, finding the dismissal justified, but did not rule on the overtime and underpayment claims. On July 3, 1956, Gomez filed a complaint in the Court of First Instance of Manila for collection of overtime pay and separation pay, alleging he worked an average of 5 hours overtime daily and was dismissed without just cause. The defendant moved to dismiss, arguing the Department of Labor’s dismissal order constituted res judicata under Section 7 of Republic Act No. 602 (Minimum Wage Law) and the ruling in Brillantes vs. Castro. The lower court granted the motion, holding the Department of Labor’s decision was final and barred the subsequent action. Gomez appealed.

ISSUE

1. Whether the decision of the Regional Office of the Department of Labor dismissing the complaint constitutes res judicata and bars the instant action.
2. Whether the Court of First Instance had jurisdiction over the action for overtime compensation and separation pay.

RULING

1. On Res Judicata: The Supreme Court held that the Department of Labor’s order of dismissal did not constitute res judicata. The Court distinguished this case from Brillantes vs. Castro, as there was no written agreement signed by the parties to submit the case for arbitration by the Wage Administration Service, as mandatorily required under Section 9, Article 7-B of the Code of Rules and Regulations to Implement the Minimum Wage Law. Without such an agreement, the Investigator’s decision had no binding force and could not bar a subsequent action.
2. On Jurisdiction: The Supreme Court affirmed the dismissal of the complaint but on a different ground: lack of jurisdiction of the Court of First Instance. The action was for overtime compensation under the Eight-Hour Labor Law (Commonwealth Act 444) and for separation pay. Citing Philippine Association of Free Labor Unions (PAFLU) vs. Tan and Reyes vs. Tan, the Court ruled that with the enactment of the Industrial Peace Act (Republic Act 875), cases involving hours of employment under the Eight-Hour Labor Law fall within the exclusive jurisdiction of the Court of Industrial Relations. The Court of First Instance only had jurisdiction over violations of the Minimum Wage Law (Republic Act 602) per its Section 16. Since Gomez’s main claim was for overtime compensation, and to avoid splitting the causes of action, the entire case was cognizable by the Court of Industrial Relations. Therefore, the complaint filed in the Court of First Instance was correctly dismissed, and the matter should be submitted to the Court of Industrial Relations.
The order of dismissal was affirmed, without costs.