FIRST DIVISION

[G.R. No. 89621. September 24, 1991.]

PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC.,

represented by its Plant General Manager ANTHONY B. SIAN,
ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE HERAYA , petitioners,
vs. HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO
OLIVA, WILFREDO CABAÑAS & FULGENCIO LEGO , respondents.

Aurelio D. Menzon for petitioners.

Mario P. Nicolasora co-counsel for petitioners.
Papiano L. Santo for private respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR ARBITER; SCOPE OF POWER;

RULE. — It must be stressed that not every controversy involving workers and their
employers can be resolved only by the labor arbiters. This will be so only if there is a
"reasonable causal connection" between the claim asserted and employee-employer
relations to put the case under the provisions of Article 217. Absent such a link, the
complaint will be cognizable by the regular courts of justice in the exercise of their civil
and criminal jurisdiction.
2. REMEDIAL LAW; CIVIL PROCEDURE; COMPLAINT FOR DAMAGE FOR
MALICIOUS PROSECUTION FILED BY EMPLOYEES AGAINST EMPLOYERS;
COGNIZABLE BY REGULAR COURTS OF JUSTICE; CASE AT BAR. — The case now
before the Court involves a complaint for damages for malicious prosecution which
was led with the Regional Trial Court of Leyte by the employees of the defendant
company. It does not appear that there is a "reasonable causal connection" between the
complaint and the relations of the parties as employer and employees. The complaint
did not arise from such relations and in fact could have arisen independently of an
employment relationship between the parties. No such relationship or any unfair labor
practice is asserted. What the employees are alleging is that the petitioners acted with
bad faith when they led the criminal complaint which the Municipal Trial Court said
was intended "to harass the poor employee" and the dismissal of which was a rmed
by the Provincial Prosecutor "for lack of evidence to establish even a slightest
probability that all the respondents herein have committed the crime imputed against
them." This is a matter which the labor arbiter has no competence to resolve as the
applicable law is not the Labor Code but the Revised Penal Code.

DECISION

CRUZ , J : p

The question now before us has been categorically resolved in earlier decisions
of the Court that a little more diligent research would have disclosed to the petitioners.
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 On the basis of those cases and the facts now before us, the petition must be denied. prLL

The private respondents were employees of the petitioner who were suspected
of complicity in the irregular disposition of empty Pepsi Cola bottles. On July 16, 1987,
the petitioners led a criminal complaint for theft against them but this was later
withdrawn and substituted with a criminal complaint for falsi cation of private
documents. On November 26, 1987, after a preliminary investigation conducted by the
Municipal Trial Court of Tanauan, Leyte, the complaint was dismissed. The dismissal
was affirmed on April 8, 1988, by the Office of the Provincial Prosecutor.
Meantime, allegedly after an administrative investigation, the private respondents
were dismissed by the petitioner company on November 23, 1987. As a result, they
lodged a complaint for illegal dismissal with the Regional Arbitration Branch of the
NLRC in Tacloban City on December 1, 1987, and demanded reinstatement with
damages. In addition, they instituted in the Regional Trial Court of Leyte, on April 1988,
a separate civil complaint against the petitioners for damages arising from what they
claimed to be their malicious prosecution.
The petitioners moved to dismiss the civil complaint on the ground that the trial
court had no jurisdiction over the case because it involved employee-employer relations
that were exclusively cognizable by the labor arbiter. The motion was granted on
February 6, 1989. On July 6, 1989, however, the respondent judge, acting on the motion
for reconsideration, reinstated the complaint, saying it was "distinct from the labor case
for damages now pending before the labor courts." The petitioners then came to this
Court for relief.
The petitioners invoke Article 217 of the Labor Code and a number of decisions
of this Court to support their position that the private respondents' civil complaint for
damages falls under the jurisdiction of the labor arbiter. They particularly cite the case
o f Getz Corporation v. Court of Appeals , 1 where it was held that a court of rst
instance had no jurisdiction over the complaint led by a dismissed employee "for
unpaid salary and other employment benefits, termination pay and moral and exemplary
damages."
We hold at the outset that the case is not in point because what was involved
there was a claim arising from the alleged illegal dismissal of an employee, who chose
to complain to the regular court and not to the labor arbiter. Obviously, the claim arose
from employee-employer relations and so came under Article 217 of the Labor Code
which then provided as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a)
The Labor Arbiters shall have the original and exclusive jurisdiction to hear and
decide within thirty (30) working days after submission of the case by the
parties for decision, the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may le involving wages, hours of work and
other terms and conditions of employment;
3. All money claims of workers, including those based on non-
payment or underpayment of wages, overtime compensation, separation pay
and other bene ts provided by law or appropriate agreement, except claims for
employees' compensation, social security, medicare and maternity benefits;
4. Cases involving household services; and
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 5. Cases arising from any violation of Article 265 of this Code,
including questions involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all
cases decided by Labor Arbiters. 2
It must be stressed that not every controversy involving workers and their
employers can be resolved only by the labor arbiters. This will be so only if there is a
"reasonable causal connection" between the claim asserted and employee-employer
relations to put the case under the provisions of Article 217. Absent such a link, the
complaint will be cognizable by the regular courts of justice in the exercise of their civil
and criminal jurisdiction.
I n Medina v. Castro-Bartolome , 3 two employees led in the Court of First
Instance of Rizal a civil complaint for damages against their employer for slanderous
remarks made against them by the company president. On the order dismissing the
case because it came under the jurisdiction of the labor arbiters, Justice Vicente Abad
Santos said for the Court:
It is obvious from the complaint that the plaintiffs have not alleged any
unfair labor practice. Theirs is a simple action for damages for tortuous acts
allegedly committed by the defendants. Such being the case, the governing
statute is the Civil Code and not the Labor Code. It results that the orders under
review are based on a wrong premise. prLL

In Singapore Airlines Ltd. v. Paño, 4 where the plaintiff was suing for damages for
alleged violation by the defendant of an "Agreement for a Course of Conversion Training
at the Expense of Singapore Airlines Limited," the jurisdiction of the Court of First
Instance of Rizal over the case was questioned. The Court, citing the earlier case of
Quisaba v. Sta. Ines Melale Veneer and Plywood, Inc. , 5 declared through Justice
Herrera:
Stated differently, petitioner seeks protection under the civil laws and
claims no bene ts under the Labor Code. The primary relief sought is for
liquidated damages for breach of a contractual obligation. The other items
demanded are not labor bene ts demanded by workers generally taken
cognizance of in labor disputes, such as payment of wages, overtime
compensation or separation pay. The items claimed are the natural
consequences flowing from breach of an obligation, intrinsically a civil dispute.
In Molave Sales, Inc. v. Laron , 6 the same Justice held for the Court that the claim
of the plaintiff against its sales manager for payment of certain accounts pertaining to
his purchase of vehicles and automotive parts, repairs of such vehicles, and cash
advances from the corporation was properly cognizable by the Regional Trial Court of
Dagupan City and not the labor arbiter, because "although a controversy is between an
employer and an employee, the Labor Arbiters have no jurisdiction if the Labor Code is
not involved."
The latest ruling on this issue is found in San Miguel Corporation v. NLRC, 7 where
the above cases are cited and the changes in Article 217 are recounted. That case
involved a claim of an employee for a P60,000.00 prize for a proposal made by him
which he alleged had been accepted and implemented by the defendant corporation in
the processing of one of its beer products. The claim was led with the labor arbiter,
who dismissed it for lack of jurisdiction but was reversed by the NLRC on appeal. In
setting aside the appealed decision and dismissing the complaint, the Court observed
through Justice Feliciano:
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 It is the character of the principal relief sought that appears essential, in
this connection. Where such principal relief is to be granted under labor
legislation or a collective bargaining agreement, the case should fall within the
jurisdiction of the Labor Arbiter and the NLRC, even though a claim for damages
might be asserted as an incident to such claim.
xxx xxx xxx

Where the claim to the principal relief sought is to be resolved not by

reference to the Labor Code or other labor relations statute or a collective
bargaining agreement but by the general civil law, the jurisdiction over the
dispute belongs to the regular courts of justice and not to the Labor Arbiter and
the NLRC. In such situations, resolution of the dispute requires expertise, not in
labor management relations nor in wage structures and other terms and
conditions of employment, but rather in the application of the general civil law.
Clearly, such claims fall outside the area of competence or expertise ordinarily
ascribed to Labor Arbiters and the NLRC and the rationale for granting
jurisdiction over such claims to these agencies disappears.

xxx xxx xxx

While paragraph 3 above refers to "all money claims of workers," it is not

necessary to suppose that the entire universe of money claims that might be
asserted by workers against their employers has been absorbed into the original
and exclusive jurisdiction of Labor Arbiters.

xxx xxx xxx

For it cannot be presumed that money claims of workers which do not
arise out of or in connection with their employer-employee relationship, and
which would therefore fall within the general jurisdiction of the regular courts of
justice, were intended by the legislative authority to be taken away from the
jurisdiction of the courts and lodged with Labor Arbiters on an exclusive basis.
The Court, therefore, believes and so holds that the "money claims of workers"
referred to in paragraph 3 of Article 217 embraces money claims which arise out
of or in connection with the employer-employee relationship, or some aspect or
incident of such relationship. Put a little differently, that money claims of
workers which now fall within the original and exclusive jurisdiction of Labor
Arbiters are those money claims which have some reasonable causal
connection with the employer-employee relationship (Ibid.).
The case now before the Court involves a complaint for damages for malicious
prosecution which was led with the Regional Trial Court of Leyte by the employees of
the defendant company. It does not appear that there is a "reasonable causal
connection" between the complaint and the relations of the parties as employer and
employees. The complaint did not arise from such relations and in fact could have
arisen independently of an employment relationship between the parties. No such
relationship or any unfair labor practice is asserted. What the employees are alleging is
that the petitioners acted with bad faith when they led the criminal complaint which
the Municipal Trial Court said was intended "to harass the poor employees" and the
dismissal of which was a rmed by the Provincial Prosecutor "for lack of evidence to
establish even a slightest probability that all the respondents herein have committed
the crime imputed against them." This is a matter which the labor arbiter has no
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 competence to resolve as the applicable law is not the Labor Code but the Revised
Penal Code. llcd

"Talents differ, all is well and wisely put," so observed the philosopher-
poet. So it must be in the case we here decide.
8

WHEREFORE, the order dated July 6, 1989, is AFFIRMED and the petition DENIED,
with costs against the petitioner.
SO ORDERED.
Narvasa, Griño-Aquino and Medialdea, JJ., concur.

Footnotes
1. 116 SCRA 86.

2. This has since been amended by Sec. 9, R.A. 6715, effective March 21, 1989, to read as
follows:

ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as
otherwise provided under this Code the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide within thirty (30) calendar days after the submission of
the case by the parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;

2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may
file involving wages, rates of pay, hours of work and other terms and conditions
of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from
the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strike and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an
amount exceeding five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases
decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining
agreement and those arising from the interpretation or enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the
same to the grievance machinery and voluntary arbitration as may be provided
in said agreements.

3. 116 SCRA 597.

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 4. 122 SCRA 671.

5. 58 SCRA 771.
6. 129 SCRA 719.
7. 161 SCRA 719.

8. "The Mountain and the Squirrel," by Ralph Waldo Emerson.

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