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248 SUPREME COURT REPORTS ANNOTATED

Bengzon vs. Inciong

*
Nos. L-48706-07. June 29, 1979.

LOURDES E. BENGZON, petitioner, vs. THE HON.

DEPUTY MINISTER OF LABOR AMADO G. INCIONG,
and STA. INES-MELALE VENEER & PLYWOOD
CORPORATION, respondents.

___________________

* SECOND DIVISION

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VOL. 91, JUNE 29, 1979 249

Bengzon vs. Inciong

Labor Law; National Labor Relations Commission; Jurisdiction

of the National Labor Relations Commission.·There is here a
manifest intent of the Labor Code to expand the jurisdiction of the
National Labor Relations. Unlike the Court of Industrial Relations
whose jurisdiction was limited to unfair labor practice cases,
representation cases, and national interest cases, the jurisdiction of
the National Labor Relations Commission was expanded to
accommodate all cases involving employer-employee relations.
Same; Same; Same; Moral Damages; National Labor Relations
Commission without jurisdiction to hear claims for moral damages
under Presidential Decree Na 1367 which amended Art. 217 of the
New Labor Code.·The Court in Garcia declared that the Court of
First Instance of Davao erred in denying the motion to dismiss the
claim for actual and moral damages as a result of the arbitrary

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dismissal of employee, on the ground that the case falls „within the
exclusive jurisdiction‰ of the National Labor Relations Commission
(NLRC) pursuant to Article 217 of the Labor Code. Although this
decision was later reconsidered, the reconsideration was based on
the fact that the case could not be refiled with the Labor Court,
since the latter had already been deprived of any jurisdiction to
hear claims for moral damages by Presidential Decree No. 1367.
Same; Same; Same; Same; When National Labor Relations
Commission can decide controversy involving award of moral
damages for illegal dismissal of an employee even with the
enactment of new law depriving the labor court of its jurisdiction
thereof; Reasons; General rule and exception; Case at bar.·The rule
is that where a court has already obtained and is exercising
jurisdiction over a controversy, its jurisdiction to proceed to the final
determination of the cause is not affected by new legislation placing
jurisdiction over such proceedings in another tribunal. The
exception to the rule is where the statute expressly provides, or is
construed to the effect that it is intended to operate as to actions
pending before its enactment. Where a statute changing the
jurisdiction of a court has no retroactive effect, it cannot be applied
to a case that was pending prior to the enactment of the statute. We
find the principles applicable to the case at bar. To require
petitioner to file a separate suit for damages in the regular courts
would be to „sanction split jurisdiction, which is prejudicial to the
orderly administration of justice.

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Bengzon vs. Inciong

ANTONIO, J.:

Petition for certiorari to reverse and set aside the Order

dated July 17, 1978 of the Deputy Minister of Labor in
NLRC Cases Nos. RB-IV-3168-75 and RB-IV-7560-76,
entitled „Lourdes E. Bengzon v. Sta. Ines-Melale Veneer &
Plywood Corporation and Robert V. Hyde.‰ The following
are the pertinent facts:
On October 24, 1975, petitioner filed a complaint for
illegal dismissal with Regional Office No. IV of the

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Department of Labor (now Ministry of Labor) against

respondent Sta. Ines-Melale Veneer & Plywood Corporation
(hereinafter referred to as Sta. Ines) and personally against
its Vice-President, Robert V. Hyde (NLRC Case No. RB-IV-
3168-75). On the basis of the stipulations of facts, the
documentary evidence and memoranda of the parties the
Labor Arbiter rendered a decision on March 31, 1976, the
dispositive portion of which reads as follows:

„WHEREFORE, the following are the orders in this case:

1. Respondent Sta. Ines-Melale Veneer & Plywood, Inc., should

be, as it is hereby ordered to pay complainant Lourdes E.
Bengzon the sum of TWO THOUSAND FIVE HUNDRED
(P2,500.00) PESOS as separation pay; and
2. Respondent Robert V. Hyde is hereby ordered to pay the
complainant the sum of THREE HUNDRED THOUSAND
(P300,000.00) PESOS as moral and exemplary damages.‰

From the above decision petitioner appealed to the

National Labor Relations Commission alleging that
respondent Sta. Ines should be held solidarity liable with
Robert V. Hyde for moral and exemplary damages.
Respondent Hyde likewise appealed from the foregoing
decision, assailing the jurisdiction of the Labor Arbiter over
his person as he was allegedly improperly summoned.
Respondent Sta. Ines did not appeal but filed, on June 2,
1976, a consolidated reply memorandum arguing that it
never authorized or ratified the act of Robert V. Hyde in
dismissing petitioner and that the National Labor
Relations Commission was without power to adjudicate the
issue of moral and exemplary damages.

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Bengzon vs. Inciong

On June 1, 1976, the National Labor Relations Commission

rendered a resolution remanding the case to the Labor
Arbiter for further proceedings on the ground that no
jurisdiction was acquired by it over Robert V. Hyde as

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respondent because of the failure at the start of the

proceedings to properly serve him with summons and a
copy of the complaint. Respondent Sta. Ines moved for
reconsideration of the NLRC resolution but the same was
denied.
On June 3, 1976, respondent Sta. Ines filed an appeal to
the Secretary of Labor from the aforesaid resolution but the
Secretary of Labor affirmed the resolution in an Order
dated September 15, 1976. On November 19, 1976, on
appeal by Sta. Ines, the Office of the President likewise
affirmed the resolution of the National Labor Relations
Commission.
During the pendency of the resolution of the NLRC, or
on July 6, 1976, petitioner filed an amended complaint with
Regional Office No. IV of the Department of Labor. Said
complaint was transmitted and certified to the NLRC for
arbitration on the following issues: (1) reinstatement with
backwages; and (2) moral and exemplary damages of
P400,000.00. This case was docketed as NLRC Case No.
RB-IV-7560-76 and was subsequently consolidated with
NLRC Case No. RB-IV-3168-75 after the latter case was
remanded to the Labor Arbiter.
After due hearing the Labor Arbiter rendered a decision
on November 18, 1977, the dispositive portion of which
reads as follows:

„Responsive to the foregoing, respondent Sta. Ines-Melale Veneer &

Plywood, Inc., and Robert V. Hyde should be, as they are hereby
ordered to pay jointly and severally complainant Lourdes E.
Bengzon separation pay in the amount of P2,500.00 and the sum of
P300,000.00 as moral and exemplary damages.‰

All the parties in the afore-mentioned consolidated cases

appealed the decision of the Labor Arbiter to the National
Labor Relations Commission.
On February 21, 1978, the NLRC rendered a decision en
banc, the dispositive portion of which reads as follows:

„WHEREFORE, the Commission has resolved to modify, as it

hereby MODIFIED the decision appealed from as follows:

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252 SUPREME COURT REPORTS ANNOTATED

Bengzon vs. Inciong

1. Respondent Sta. Ines-Melale Veneer & Plywood,

Inc. is ordered to pay the complainant P54,394.62
as backwages from September 16, 1975 to February
21, 1978, P2,000.00 as separation pay and
P300,000.00 as moral and exemplary damages or
the total sum of P354,394.62;
2. The claim for reinstatement of the complainant to
the same position held by her prior to her dismissal
is denied;
3. Respondent Robert V. Hyde is absolved from any
liability.‰

On May 1, 1978, Presidential Decree No. 1367 was

promulgated, amending paragraph (3) of Article 217 of the
Labor Code, as follows:

„(a) The Labor Arbiters shall have exclusive jurisdiction

to hear and decide the following cases involving all
workers, whether agricultural or non-agricultural:

1) Unfair labor practice cases;

2) Unresolved issues in collective bargaining,
including those which involve wages, hours of work,
and other terms and conditions of employment; and
3) All other cases arising from employer-employee
relations duly indorsed by the Regional Directors in
accordance with the provisions of this Code;
Provided, that the Regional Directors shall not
indorse and Labor Arbiters shall not entertain
claims for moral or other forms of damages.‰

On May 24, 1978, respondent Sta. Ines filed with the

Secretary of Labor (now Minister of Labor) a notice and
memorandum of appeal from the decision en banc of the
NLRC. The appeal was opposed by petitioner on June 26,
1978.
On July 17, 1978, respondent Deputy Minister of Labor
issued an Order affirming the decision of the NLRC but

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modifying the same by setting aside the award of damages

on the ground of lack of jurisdiction in accordance with
Presidential Decree No. 1367. The dispositive portion of the
said Order reads as follows:

„ALL THE FOREGOING CONSIDERATION let the Decision en

banc of the Commission, dated February 21, 1978, be as it is

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Bengzon vs. Inciong

hereby, affirmed with modification, in that the award of damages is

set aside for lack of jurisdiction.‰

Petitioner contends that respondent Deputy Minister

gravely abused his discretion in disclaiming jurisdiction on
the issue of damages, as under Article 217 of the Labor
Code prior to its amendment by Presidential Decree No.
1367, Labor Arbiters had jurisdiction to hear and decide
claims for moral damages arising out of employer-employee
relations. Petitioner points out that Presidential Decree
No. 1367 was promulgated on May 1, 1978, long after
NLRC consolidated cases Nos. RB-IV-3168-75 and RB-IV-
7560-76 were decided by the Labor Arbiter on November
18, 1978, which decision was in turn affirmed, with
modification, on appeal to the NLRC on February 21, 1978.
Respondent Sta. Ines, however, invoking Quisaba v. Sta.
1
Ines-Melale Veneer & Plywood, Inc., argues that
petitionerÊs claim for moral and exemplary damages is
properly cognizable by the regular courts and not by the
National Labor Relations Commission and that
Presidential Decree No. 1367 was promulgated on May 1,
1978 „to correct the erroneous assumption of jurisdiction by
Labor Arbiters and the National Labor Relations
Commission on issues of moral and other forms of
damages.‰
On February 6, 1979, respondent Sta. Ines manifested
before this Court that it has fully satisfied the claim of
petitioner with respect to backwages and separation pay, in
the total amount of P56,394.62, as evidenced by a cash

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voucher dated February 2, 1979, duly signed by petitioner.

At the crux of the controversy is the jurisdictional
authority of Labor Arbiters and the NLRC prior to the
enactment of Presidential Decree No. 1367, over damages
grounded on the dismissal per se of petitioner, since in fact,
she asks for reinstatement with backwages.
At the time when the Labor Arbiter rendered a decision
in consolidated cases Nos. RB-IV-3168-75 and RB-IV-7560-
76 on November 18, 1977, the applicable law was Article
217 of the Labor Code, which provides as follows:

___________________

1 L-38088, August 30, 1974, 58 SCRA 771.

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Bengzon vs. Inciong

„ART. 217. Jurisdiction of Labor Arbiters and the Commission.·(a)

The Labor Arbiters shall have exclusive jurisdiction to hear and
decide the following cases involving all workers, whether
agricultural or non-agricultural:

(1) Unfair labor practice cases;

(2) Unresolved issues in collective bargaining including those
which involve wages, hours of work, and other terms and
conditions of employment duly indorsed by the Bureau in
accordance with the provisions of this Code;
(3) All money claims of workers involving non-payment or
underpayment of wages, overtime or premium
compensation, maternity or service incentive leave,
separation pay and other money claims arising from
employer-employee relation, except claims for employeeÊs
compensation, social security and medicare benefits and as
otherwise provided in Article 128 of this Code;
(4) Cases involving household services; and
(5) All other cases arising from employer-employee relation
unless expressly excluded by this Code.

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(b) The Commission shall have exclusive appellate jurisdiction

over all cases decided by Labor Arbiters, compulsory
arbitrators, and voluntary arbitrators in appropriate cases
provided in Article 263 of this Code.‰

There is here a manifest intent of the Labor Code to

expand the jurisdiction of the National Labor Relations.
Unlike the Court of Industrial Relations whose jurisdiction
was limited to unfair labor practice cases, representation
cases, and national interest cases, the jurisdiction of the
National Labor Relations Commission was expanded to
accommodate all cases involving employer-employee
2
relations. Applying Article 217 of the

____________________

2 „Unlike the Court of Industrial Relations which had jurisdiction only

over unfair labor practices, representation cases, and national interest
cases, the jurisdiction of the proposed National Labor Relations
Commission is expanded to accommodate all cases involving employer-
employee relations, including situations arising from the temporary
suspension of the right to strike and the right to lockout, namely:

1. Unfair labor practices;

2. Unresolved issues in collective bargaining;

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Bengzon vs. Inciong

3
Labor Code, this Court, in Garcia v. Martinez, et al., ruled
that:

„The provisions of paragraphs 3 and 5 of Article 317 are broad and

comprehensive enough to cover the claim of an employee for
damages allegedly arising from his unjustified dismissal * * *. His
claim was a consequence of the termination of their employer-
employee relation.‰

The Court in Garcia declared that the Court of First

Instance of Davao erred in denying the motion to dismiss

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the claim for actual and moral damages as a result of the

arbitrary dismissal of employee, on the ground that the
case falls „within the exclusive jurisdiction‰ of the National
Labor Relations Commission (NLRC) pursuant to Article
217 of the Labor Code. Although this decision was later
reconsidered, the reconsideration was based on the fact
that the case could not be refiled with the Labor Court,
since the latter and already been deprived of any
jurisdiction to hear claims for moral damages by
Presidential Decree No. 1367.
In the case at bar, petitionerÊs complaint was filed
directly with the Regional Office of the Ministry of Labor
where the case was heard and decided. At the time the case
was heard and decided, the Labor Court had jurisdiction
over the case. Neither can private respondent rely upon
Quisaba v. Sta. Ines-Melale Veneer Ply wood, Inc., supra, to
justify the action taken by respondent Deputy Minister of
Labor. In Quisaba, the complaint for damages was based on
tort, the violation of a private legal right independent of
contract. Thus, Quisaba did not ask for reinstatement or
backwages, but predicated his claim of damages on the
manner of his dismissal and the consequent effects of such
dismissal. Here, petitionerÊs action is based on

___________________

3. Pure money claims, including violations of the law on household

helpers; and
4. All other matters arising from employer-employee relations.‰
(Prepared by Department of Labor Staff Committee on Labor
Code. Italics supplied.)

3 L-47629, August 3, 1978, 84 SCRA 577.

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256 SUPREME COURT REPORTS ANNOTATED

Bengzon vs. Inciong

her contract, and her desire to reinstate their employer-

employee relations, hence, she prays for her reinstatement
with backwages. Unlike section 2 of Presidential Decree

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No. 21, which was the law involved in Quisaba, Article 217
of the Labor Code confers broader powers on Labor
Arbiters and the Commission by vesting upon them
exclusive jurisdiction to hear „all other cases arising from
employer-employee relation unless expressly excluded by
this Code.‰
The rule is that where a court has already obtained and
is exercising jurisdiction over a controversy, its jurisdiction
to proceed to the final determination of the cause is not
affected by new legislation placing jurisdiction over such
4
proceedings in another tribunal. The exception to the rule
is where the statute expressly provides, or is construed to
the effect that it is intended to operate as to actions
5
pending before its enactment. Where a statute changing
the jurisdiction of a court has no retroactive effect, it
cannot be applied to a case that was pending prior to the
6
enactment of the statute. We find the principles applicable
to the case at bar. To require petitioner to file a separate
suit for damages in the regular courts would be to „sanction
split jurisdiction, which is prejudicial to the orderly
7
administration of justice.
WHEREFORE, in view hereof, certiorari is granted and
the respondent Deputy Minister of Labor is hereby directed
to

____________________

4 Iburan v. Labes, L-2671, Aug. 30, 1950, 87 Phil. 234; Insurance

Company of North America vs. United States Lines Company, et al., L-
21021, May 27, 1966, 17 SCRA 301.
5 20 Am. Jur. 2d, Section 150.
6 Mullen v. Renzleman, 31 Okla. 53, 119 P. 641.
7 Progressive Labor Asso. v. Atlas Consolidated Mining and
Development Corp., L-27585, May 29, 1970, 33 SCRA 349, 355; Leoquenco
v. Canada Dry Bottling Co. of the Phils. Inc. Employees Asso., L-28621;
Feb. 22, 1971, 37 SCRA 535; Associated Labor Union v. Cruz, L-28978,
Sept. 22, 1971, 41 SCRA 12; Associated Labor Union v. Central Azucarera
de la Carlota, L-25649, June 30, 1975, 64 SCRA 564; Guevara v.
Gopengco, L-39126, Sept. 30, 1975, 67 SCRA 236; Goodrich Employees
Association v. Flores, L-30211, Oct. 5, 1976, 73 SCRA 297; Holganza v.
Apostol, L-32953, March 31, 1977, 76 SCRA 190; Maria Cristina
Fertilizer Plant Employees Association v. Tandayag, L-29217 & L-33935,

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May 11, 1978, 83 SCRA 56.

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Bengzon vs. Inciong

decide the appeal on the question of moral and exemplary

damages, inviting attention to the fact that in their „Notice
and Memorandum of Appeal‰, private respondent raised
only questions of law and did not impugn the findings of
fact of the NLRC as to the amount of damages. Costs
against private respondent.

Barredo (Chairman), Aquino, Concepcion Jr. and

Santos, JJ., concur.
Abad Santos, J., did not take part.

Petition granted.

Notes.·The NLRC has no jurisdiction over civil

disputes. (Quisaba vs. Sta. Ines-Melale Veneer & Plywood,
Inc., 58 SCRA 771).
A claim for overtime pay, wage differential and
separation pay for unjust dismissal falls within the
jurisdiction of the NLRC.(Jacqueline Industries vs. NLRC,
66 SCRA 397).
The NLRC may decide a labor dispute without giving
the employer a chance to submit the case for arbitration
provided that the record shows that the parties were duly
heard. (San Miguel Corp. vs. Secretary of Labor, 64 SCRA
56).
The findings of facts of the NLRC are binding on the
courts. (Antipolo Highway Lines vs. Inciong, 64 SCRA 441).
Cases pending before the old National Labor Relations
Commission should be transferred to, and processed by, the
new National Labor Relations Commission, such cases
were not rendered moot by Labor Code, Presidential Decree
No. 626. (Mafinco Trading Corporation vs. Ople, 70 SCRA
139).
The present NLRC is an administrative board partaking
of the nature of a special labor tribunal. Aside from its

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adjudicative jurisdiction; the NLRC can hold a person in

contempt and impose penalties. The Labor Arbiters and the
NLRC can execute their decisions by issuing writ of
execution enforceable by the Sheriff. (Garcia vs. Martinez,
84 SCRA 577).
Claim for damages allegedly arising from unjustified
dismissal of an employee falls within the exclusive
jurisdiction

258

258 SUPREME COURT REPORTS ANNOTATED

Commissioner of Customs vs. Court of Tax Appeals

of the labor arbiter and the National Labor Relations

Commission under the New Labor Code. (Garcia vs.
Martinez, 84 SCRA 577).

··o0o··

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