Banez vs Valdevilla (Labor Law)

Banez vs Valdevilla, 

GR No. 128024, May 9, 2000, 

331 SCRA 584

Facts: 

Petitioner was the sales operations manager of private respondent in its branch in Iligan City. In 1993, private respondent "indefinitely suspended" petitioner and the latter filed a complaint for illegal dismissal with the NLRC-Iligan City. LA Palangan found petitioner to have been illegally dismissed. NLRC likewise dismissed the same for having filed out of time. Elevated by petition for certiorari before SC, the case was dismissed on technical grounds. Private respondent filed a complaint for damages before the RTC of Misamis Oriental to which petitioner filed a motion to dismiss the above complaint. He interposed in the court below that the action for damages, having arisen from an employer-employee relationship, was squarely under the exclusive original jurisdiction of the NLRC under Article 217(a), paragraph 4 of the Labor Code and is barred by reason of the final judgment in the labor case. He accused private respondent of splitting causes of action 

Issue:

Whether Art. 217 apply to employer with regard to its claim of damages against its employees 

Ruling:

Article 217 should apply with equal force to the claim of an employer for actual damages against its dismissed employee, where the basis for the claim arises from or is necessarily connected with the fact of termination, and should be entered as a counterclaim in the illegal dismissal case In the case at bar, private respondent's claim against petitioner for actual damages arose from a prior employer-employee relationship. In the first place, private respondent would not have taken issue with petitioner's "doing business of his own" had the latter not been concurrently its employee. Thus, the damages alleged in the complaint below are: first, those amounting to lost profits and earnings due to petitioner's abandonment or neglect of his duties as sales manager, having been otherwise preoccupied by his unauthorized installment sale scheme; and second, those equivalent to the value of private respondent's property and supplies which petitioner used in conducting his "business ". Second, and more importantly, to allow respondent court to proceed with the instant action for damages would be to open anew the factual issue of whether petitioner's installment sale scheme resulted in business losses and the dissipation of private respondent's property. This issue has been duly raised and ruled upon in the illegal dismissal case. Respondent court clearly having no jurisdiction over private respondent's complaint for damages. Thus, private respondent's remedy is not in the filing of this separate action for damages, but in properly perfecting an appeal from the Labor Arbiter's decision.