Dai Chi v Villarama (1994)

Dai-Chi v Villarama (RTC judge) and Limjuco

On July 29, 1993, the petitioner Daichi electronics filed a complaint for damages with RTC branch 156 for an employee’s (Limjuco) violation of their contract in 1990 which stipulated that the termination of service of an employee restricted him from working in a company which has a similar set of products or ventures for a span of 2 years following the termination of service.

The petitioner claimed that respondent became an employee of such a company called Angel Sound with the same position as head of material management control before the 2 years was up.

The petitioner sought to claim 100k in damages and prevent the former employee from working in the rival business within the 1 year timespan.

The respondent court under villarama claimed that it had no jurisdiction because the complaint was for damages from labor-employee relations and should be adjudicated under the Labor Arbiter under Art 217 s 4 of the LC.

The petitioner asked for reversal because the case was recognizable under the regular courts and that the cause of action didn’t arise from employee-employer relationships even if the claim was in the employee’s contract.

Issue: Is the petitioner’s claim for damages one arising from employee-employer relations?

Decision: No, petition granted

1. Art 217 s4 of the LC stipulated that Labor Arbiters have exclusive jurisdiction to hear and decide cases for workers with claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations.

The court held that the cuase of action was under Civil Law, not the labor code. Why?

 The petitioner sought to recover damages agreed upon in the contract as redress for respondent’s breach of his contractual obligation to its damage and prejudice. He also didn’t ask for relief under the Labor Code.

The applicable case law was Singapore airlines v Pano where the employer’s claim for damages was based on wanton failure and refusal without just cause to report to duty coupled with the averment that the employee maliciously and with bad faith violated the contract. The employee didn’t report for duty as a course of convention training- quasi-delict diba!

There must be a causal connection for claims provided in the RT217 S4 OF THE LC. Only when there is such a connection with other claims can damages be considered as arising from employer-employee relations.

2. In SMC v NLRC, the interpretation of Art 217 then was focused on in the phrase “all money claims of workers” in par 3.

There was no phrase “arising from employer-employee relations at that time” (art 217 amended by bp blg 227, not yet the present labor code)

DOCTRINE: The use of noscitur a sociis wherein the entire universe of family claims asserted by workers has been observed into the exclusive jurisdiction of labor arbiters.

Nos a soc was also used to limit par 3 (par 4 in the present labor code) of art 217 wherein it was read in relation to par 1 (unfair labor practices), par 2 (terms and conditions of employment), par 4 (household services) and par 5 (restrictions on activities of employees and employers)

There was a unifying element which referred to cases out of employer-employee relations.

Money claims that didn’t arise out of such relations was to be taken in by regular courts. The claims should have a causal connection with employer-employee relations

In Ocheda, the action based on tort or quasi-delict with no such causal connection was in the juris of the regular courts.

In pepsi-cola, the action by employees against the malicious filing of the employer of a criminal complaint against them was with the regular courts.

The rationale for the Dai-chi case was that the complaint for damages wasn’t anchored on term of employee’s service but the effects of such term.

Cases decided under the earlier version of Art 217 was also consistent in allocating civil disputes bet employers and employes to the realm of the regular courts. In Medina (1929), the civil complaint for damagaes against the employer for slanderous remarks against the employtess were tried in the civil courts. In Laron (1984), the court held that the Labor Arbiters have no jurisdiction if the labor code wasn’t involved.