Published 4 March 2022, The Daily Tribune

When a person (natural or juridical) intends to file a case against another, the crucial thing to know is where to file that case, which court has jurisdiction? Filing of legal action with the court that has no jurisdiction will result in the dismissal of the claim, despite its merit.

In the recent decision entitled “Esico vs Alphaland Corporation and Alphaland Development Inc.” (G.R. 216716, 17 November 2021), the Supreme Court (SC) clarified where jurisdiction lies for money claim (even if the same is) connected with an employment contract.

Based on the case, Esico was employed by PhilWeb Corporation (Phil Web), a part of respondents’ group of companies. PhilWeb initially hired Esico as Risk & Security Management Officer.

Thereafter, respondent Alphaland concurrently engaged Esico as a rotary wing pilot assigned to fly the chairperson of respondents’ group of companies to his various engagements within and outside the country. The engagement letter provides, among others, that the Company agrees to advance the expenses necessary to send him on ground and flight course training. In turn, he agreed to render service to the Company for a minimum period of five years beginning on the start date indicated above. Should he fail to complete minimum years of service, Esico shall reimburse the Company for the expenses spent on his training subject to proportionate reduction equivalent to 5 percent per completed quarter of actual service.

After more than two (2) years, Esico tendered his resignation, citing various reasons therefor. As a consequence of his resignation, respondents demanded from Esico reimbursement of the amount corresponding to a portion of his flight training expenses. Esico refused to pay. Thus, the respondents filed a complaint against Esico for alleged wrongful resignation and damages with the National Labor Relations Commission (NLRC), based on the employment contract.

We now face the issue, does the Labor Arbiter (LA) or NLRC have jurisdiction over the case filed by Alphaland against Esico for the alleged wrong resignation and damages based on the employment contract?

The SC answered in the negative. The bone of contention between the parties lies in the interpretation of the employment contract, specifically the clause on the minimum service requirement in consideration of expenses (advances) for flight trainings. Unarguably, respondents claim payment of actual damages equivalent to the amount they advanced for Esico’s flight training who reneged on his contractual obligation by his premature resignation. Respondents cause of action, the supposed violation of the right-duty correlative between the parties, hinges on the enforceability of the contentious clause in the employment contract. Clearly, respondents’ recourse against Esico is based on the law on contracts. The labor tribunals do not have jurisdiction to settle various issues necessitating application of civil laws on obligations and contracts. Moreover, in determining which tribunal has jurisdiction over a case, the SC considers not only the status or relationship of the parties, but more so the nature of the question that is the subject of controversy.

Respondents further asserted that Esico’s failure to serve written notice of his resignation at least a month prior violated Article 300(285)(a)54 of the Labor Code which makes him liable to pay for damages.

This claim for damages, however, still arose from Esico’s supposed breach of employment contract. The SC concluded that jurisdiction is conferred by law and not by the parties. The Labor Arbiter and the NLRC cannot exercise jurisdiction over respondents’ complaint just by the mere expedient of citing the employer-employee relationship between the parties and designating it as one for “wrongful resignation with claims of damages.”

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