AMECOS vs Lopez

Doctrine: The labor arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the civil code

The Facts:Amecos Innovations (Amecos) and its president, Antonio (Mateo) received a subpoena from the Office of the City Prosecutor of Quezon City in connection with a complaint filed by the Social Security System for alleged delinquency in the remittance of SSS contributions, specifically that of their former employee, Eliza (Lopez). In their explanation, Amecos averred that when it hired Eliza in 2001, the latter refused to provide her SSS number, hence it no longer enrolled her at the SSS and did not deduct her corresponding contributions up to the time of her termination. The complaint was eventually withdrawn when Amecos settled its obligations to the SSS. Thereafter, Amecos sent a demand letter to Eliza for her to pay P27,791.65, representing her share in the SSS contributions and expenses for processing. When Eliza ignored the letter, the company filed a complaint for sum of money and damages against Eliza before the Metropolitan Trial Court of Manila. Eliza filed her Motion to Dismiss, alleging that the she was a former employee of the Amecos; that the company deliberately failed to deduct and remit her SSS contributions; that the company filed the case in retaliation for her filing an illegal dismissal case against the company; and the regular courts have no jurisdiction over the case as it arose out of their employer-employee relationship.The MTC dismissed the case for lack of jurisdiction, which was affirmed by the RTC. Their Petition for Review with the Court of Appeals suffered the same fate, the latter ruling that the matter of SSS contribution arose out of an employer-employee relationship, hence must be filed with the NLRC, even if it is the employer who initiated the complaint against the employee. The company filed its petition for review on certiorari with the Supreme Court, averring that regular ours, not the NLRC, have jurisdiction over claims for reimbursement arising from employer-employee relationships and misrepresentations ; that their Complaint as one based on Articles 19, 22 and 2154 of the Civil Code, when Eliza misrepresented that there was no need for enrolling her at the SSS since she was employed by another outfit; that the employer-employee relationship was merely incidental; and Eliza was unjustly enriched by reason of the company paying her share in the SSS even if it was not legally obligated to do so.

The Courts ruling:The Court denies the Petition.This Court holds that as between the parties, Article 217(a)(4) of the Labor Code is applicable. Said provision bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employer-employee relations. The observation that the matter of SSS contributions necessarily flowed from the employer-employee relationship between the parties shared by the lower courts and the CA is correct; thus, petitioners claims should have been referred to the labor tribunals. In this connection, it is noteworthy to state that the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the Civil Code.1At the same time, it cannot be assumed that since the dispute concerns the payment of SSS premiums, petitioners claim should be referred to the Social Security Commission (SSC) pursuant to Republic Act No. 1161, as amended by Republic Act No. 8282.2As far as SSS is concerned, there is no longer a dispute with respect to petitioners accountability to the System; petitioners already settled their pecuniary obligations to it. Since there is no longer any dispute regarding coverage, benefits, contributions and penalties to speak of, the SSC need not be unnecessarily dragged into the picture.3Besides, it cannot be made to act as a collecting agency for petitioners claims against the respondent; the Social Security Law should not be so interpreted, lest the SSC be swamped with cases of this sort.At any rate, it appears that petitioners do not have a cause of action against respondent. The Complaint in Civil Case No. 04-27802 reads in part:STATEMENT OF FACTS AND CAUSES OF ACTION1. On or about 15 January 2001, [petitioners] hired [respondent] as a Marketing Assistant to promote the products of [petitioners].2. Immediately, [respondent] represented that she had other gainful work and that she was also self-employed for which reason, she refused to divulge her [SSS] Number and refused to be deducted her share in the [SSS] contributions. In her bio-data submitted to [petitioners], she did not even indicate her SSS [N]umber. x x x [These] representations were later found out to be untrue and [respondent] knew that.3. Misled by such misrepresentation, [petitioners] employees no longer deducted her corresponding SSS contributions up to the time of her termination from employment on or about 18 February 2002.4. On or about 30 May 2003, to the unpleasant surprise and consternation of [petitioner] Mateo, he received a Subpoena x x x pursuant to a criminal complaint against [petitioner] Dr. Antonio Mateo for alleged un-remitted SSS Contributions including that corresponding to the [respondent]. Upon subsequent clarification with the Social Security System, only that portion corresponding to the [respondents] supposed unremitted contribution remained as the demandable amount. The total amount demanded was P18,149.95. x x x5. On or about 24 July 2003, [petitioner] Mateo had to explain to the Social Security System the circumstances as to why no contributions reflected for [respondent]. x x x6. On or about 31 July 2003, [petitioners] had to pay the Social Security System the amount of P18,149.95 including the share which should have been deducted from [respondent] in the amount of P12,291.62. x x x7. With this development, some of [petitioners] employees felt troubled and started to doubt x x x whether or not their SSS contributions were being remitted or paid by the [petitioners]. [Petitioner] Mateo had to explain to them why there was an alleged deficiency in SSS contributions and had to assure them that their contributions were properly remitted.8. As a result of these events, [petitioner] Mateo, for days, felt deep worry and fear leading to sleepless nights that the Social Security System might prosecute him for a possible criminal offense.9. [Petitioner] Mateo also felt extreme embarrassment and besmirched reputation as he, being a recognized inventor, a dean of a reputable university and a dedicated teacher, was made the butt of ridicule and viewed as a shrewd businessman capitalizing on even the SSS contributions of his employees. x x x10. On or about 15 January 2004, in order to [recover] what is due [petitioners], they sent a demand letter to [respondent] for her to pay the amount of P27,791.65 as her share in the SSS contributions and other expenses for processing. x x x11. This demand, however, fell on deaf ears as [respondent] did not pay and has not paid to date the amount of her share in the SSS contributions and other amounts demanded.12. For such malicious acts and the suffering befalling [petitioner] Mateo, [respondent] is liable for moral damages in the amount of FIFTY THOUSAND PESOS (P50,000.00).13. For having made gross misrepresentation, she is liable for exemplary damages in the amount of FIFTY THOUSAND PESOS (P50,000.00) to serve as a warning for the public not to follow her evil example.14. As [petitioners] were compelled to file the instant suit to protect and vindicate [their] right and reputation, [respondent] should also be held liable for attorneys fees in the amount of FIFTY THOUSAND PESOS (P50,000.00) in addition to the costs of this suit.PRAYER[Petitioners] respectfully [pray] that a judgment, in [their] favor and against [respondent], be rendered by this Honorable Court, ordering [respondent]:1. To pay the amount due of TWENTY SEVEN THOUSAND SEVEN HUNDRED NINETY ONE AND 65/100 (P27,791.65) representing her share in the SSS contributions and processing costs, with interest, at legal rate, from the time of the filing of this Complaint;2. To pay FIFTY THOUSAND PESOS (P50,000.00) for moral damages;3. To pay FIFTY THOUSAND PESOS (P50,000.00) for exemplary damages;4. To pay FIFTY THOUSAND PESOS (P50,000.00) as attorneys fees;5. To pay the costs of this suit.[Petitioners] further [pray] for such other relief as are just and equitable under the circumstances4.In fine, petitioners alleged that respondent misrepresented that she was simultaneously employed by another company; consequently, they did not enroll her with the SSS or pay her SSS contributions. Likewise, when petitioners eventually paid respondents SSS contributions as a result of the filing of a complaint by the SSS, respondent was unjustly enriched because the amount was not deducted from her wages in Amecos.The evidence, however, indicates that while respondent was employed, Amecos did not remit premium contributions both employer and employees shares to the SSS; the SSS demand letter5sent to it covers non-payment of SSS premium contributions from January 2001 up to April 2002, amounting to P85,687.846.The Amecos payroll7covering the period from January 30 to November 29, 2001 likewise shows that no deductions for SSS contributions were being made from respondents salaries. This can only mean that during the period, Amecos was not remitting SSS contributions whether the employer or employees shares pertaining to respondent. As such, during her employment with Amecos, respondent was never covered under the System as SSS did not know in the first instance that petitioners employed her, since the petitioners were not remitting her contributions. Petitioners were forced to remit monthly SSS contributions only when SSS filed I.S. No. 03-6068 with the Quezon City Prosecutors Office. By that time, however, respondent was no longer with Amecos, as her employment was terminated sometime in mid-February of 2002.Given the above facts, it is thus clear that petitioners have no cause of action against the respondent in Civil Case No. 04-27802. Since Amecos did not remit respondents full SSS contributions, the latter was never covered by and protected under the System. If she was never covered by the System, certainly there is no sense in making her answerable for the required contributions during the period of her employment. And it follows as a matter of consequence that claims for other damages founded on the foregoing non-existent cause of action should likewise fail.WHEREFORE, premises considered, the Petition isDENIED. The assailed March 22, 2007 and the May 23, 2007 Resolutions of the Court of Appeals in CA-G.R. SP No. 96959 areAFFIRMED.SO ORDERED.

PIA VS OPLEPAKISTAN INTERNATIONAL AIRLINES (PIA) CORPORATION vs HON. BLAS F. OPLE, in his capacity as Minister of Labor; HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister; ETHELYNNE B. FARRALES and MARIA MOONYEEN MAMASIGG.R. No. 61594 September 28, 1990FACTS: On 2 December 1978, petitioner Pakistan International Airlines Corporation (PIA), a foreign corporation licensed to do business in the Philippines, executed in Manila 2 separate contracts of employment, one with private respondent Farrales and the other with private respondent Mamasig. 1 The contracts, which became effective on 9 January 1979, provided in pertinent portion as follows:5. DURATION OF EMPLOYMENT AND PENALTYThis agreement is for a period of 3 years, but can be extended by the mutual consent of the parties.xxx xxx xxx6. TERMINATIONxxx xxx xxxNotwithstanding anything to contrary as herein provided, PIA reserves the right to terminate this agreement at any time by giving the EMPLOYEE notice in writing in advance one month before the intended termination or in lieu thereof, by paying the EMPLOYEE wages equivalent to one months salary.xxx xxx xxx10. APPLICABLE LAW:This agreement shall be construed and governed under and by the laws of Pakistan, and only the Courts of Karachi, Pakistan shall have the jurisdiction to consider any matter arising out of or under this agreement.Farrales & Mamasig (employees) were hired as flight attendants after undergoing training. Base station was in Manila and flying assignments to different parts of the Middle East and Europe.Roughly 1 year and 4 months prior to the expiration of the contracts of employment, PIA through Mr. Oscar Benares, counsel for and official of the local branch of PIA, sent separate letters, informing them that they will be terminated effective September 1, 1980.Farrales and Mamasig jointly instituted a complaint, for illegal dismissal and non-payment of company benefits and bonuses, against PIA with the then Ministry of Labor and Employment (MOLE).PIAs Contention: The PIA submitted its position paper, but no evidence, and there claimed that both private respondents were habitual absentees; that both were in the habit of bringing in from abroad sizeable quantities of personal effects; and that PIA personnel at the Manila International Airport had been discreetly warned by customs officials to advise private respondents to discontinue that practice. PIA further claimed that the services of both private respondents were terminated pursuant to the provisions of the employment contract.Favorable decision for the respondents. The Order stated that private respondents had attained the status of regular employees after they had rendered more than a year of continued service; that the stipulation limiting the period of the employment contract to 3 years was null and void as violative of the provisions of the Labor Code and its implementing rules and regulations on regular and casual employment; and that the dismissal, having been carried out without the requisite clearance from the MOLE, was illegal and entitled private respondents to reinstatement with full backwages.Decision sustained on appeal. Hence, this petition for certiorariISSUE: (Relative to the subject) Which law should govern over the case? Which court has jurisdiction?

HELD: Philippine Law and Philippine courtsPetitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly, the law of Pakistan as the applicable law of the agreement and, secondly, lays the venue for settlement of any dispute arising out of or in connection with the agreement only [in] courts of Karachi Pakistan.We have already pointed out that the relationship is much affected with public interest and that the otherwise applicable Philippine laws and regulations cannot be rendered illusory by the parties agreeing upon some other law to govern their relationship.the contract was not only executed in the Philippines, it was also performed here, at least partially; private respondents are Philippine citizens and respondents, while petitioner, although a foreign corporation, is licensed to do business (and actually doing business) and hence resident in the Philippines; lastly, private respondents were based in the Philippines in between their assigned flights to the Middle East and Europe. All the above contacts point to the Philippine courts and administrative agencies as a proper forum for the resolution of contractual disputes between the parties.Under these circumstances, paragraph 10 of the employment agreement cannot be given effect so as to oust Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and in any event, the petitioner PIA did not undertake to plead and prove the contents of Pakistan law on the matter; it must therefore be presumed that the applicable provisions of the law of Pakistan are the same as the applicable provisions of Philippine law.[DOCTRINE OF PROCESSUAL PRESUMPTION, eh?]Petition denied.

NOTES:Another Issue: petitioner PIA invokes paragraphs 5 and 6 of its contract of employment with private respondents Farrales and Mamasig, arguing that its relationship with them was governed by the provisions of its contract rather than by the general provisions of the Labor Code.A contract freely entered into should, of course, be respected, as PIA argues, since a contract is the law between the parties. The principle of party autonomy in contracts is not, however, an absolute principle. The rule in Article 1306, of our Civil Code is that the contracting parties may establish such stipulations as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy. Thus, counter-balancing the principle of autonomy of contracting parties is the equally general rule that provisions of applicable law, especially provisions relating to matters affected with public policy, are deemed written into the contract. Put a little differently, the governing principle is that parties may not contract away applicable provisions of law especially peremptory provisions dealing with matters heavily impressed with public interest. The law relating to labor and employment is clearly such an area and parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. It is thus necessary to appraise the contractual provisions invoked by petitioner PIA in terms of their consistency with applicable Philippine law and regulations.