G.R. No. L-48706-07 - Bengzon vs. Inciong

Case Digest (G.R. No. L-48706-07)
Expanded Legal Reasoning Model

Facts:

Initial Filing and First Proceedings

On October 24, 1975, petitioner Lourdes E. Bengzon filed a complaint for illegal dismissal with Regional Office No. IV of the Department (now Ministry) of Labor against respondent Sta. Ines-Melale Veneer & Plywood Corporation and against its Vice-President, Robert V. Hyde (NLRC Case No. RB-IV-3168-75).
The complaint was based on allegations of unjust dismissal and was supported by a stipulation of facts, documentary evidence, and memoranda of the parties.
The Labor Arbiter rendered a decision on March 31, 1976, awarding:

P2,500.00 as separation pay against Sta. Ines-Melale Veneer & Plywood Corporation.
P300,000.00 as moral and exemplary damages against Robert V. Hyde.

Pre-Appeal and Jurisdictional Issues

Petitioner appealed to the National Labor Relations Commission (NLRC) seeking solidary liability on moral and exemplary damages against respondent Sta. Ines, in addition to Robert V. Hyde.
Robert V. Hyde appealed on the ground of lack of proper service, questioning the Labor Arbiter’s jurisdiction over his person.
Respondent Sta. Ines did not initially appeal the decision but filed a consolidated reply memo on June 2, 1976, arguing:

That it did not authorize or ratify the actions of Robert V. Hyde in dismissing the petitioner.
That the NLRC lacked power over claims for moral and exemplary damages.

Remand and Consolidated Proceedings

On June 1, 1976, the NLRC rendered a resolution remanding the case back to the Labor Arbiter due to the improper service of summons to Robert V. Hyde.
Respondent Sta. Ines sought reconsideration of the NLRC resolution, which was denied.
Thereafter, Sta. Ines appealed the NLRC resolution to the Secretary of Labor on June 3, 1976, and the appeal was affirmed on September 15, 1976; later, on November 19, 1976, the Office of the President also affirmed the NLRC resolution.

Amended Complaint and Consolidation of Cases

During the pendency of the NLRC proceedings, on July 6, 1976, petitioner filed an amended complaint with Regional Office No. IV of the Department of Labor.
The amended complaint was certified to the NLRC, raising the issues of:

Reinstatement with backwages
Moral and exemplary damages to the tune 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 remand.

Subsequent Labor Arbiter and NLRC Rulings

On November 18, 1977, the Labor Arbiter rendered a decision consolidating both cases, ordering:

Sta. Ines-Melale Veneer & Plywood Corporation and Robert V. Hyde to jointly and severally pay P2,500.00 as separation pay and P300,000.00 as moral and exemplary damages.

All parties appealed the Labor Arbiter’s decision to the NLRC.
On February 21, 1978, the NLRC, in an en banc decision, modified the decision as follows:

Sta. Ines-Melale Veneer & Plywood Corporation was ordered to pay:

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 (totaling P354,394.62).

The petitioner's claim for reinstatement was denied.
Robert V. Hyde was absolved of any liability.

Presidential Decree No. 1367 and Subsequent Appeal

On May 1, 1978, Presidential Decree No. 1367 was promulgated, amending Article 217 of the Labor Code to exclude Labor Arbiters (and by effect the NLRC) from adjudicating claims for moral or other forms of damages.
On May 24, 1978, Sta. Ines filed a notice and memorandum of appeal with the Secretary of Labor against the NLRC decision, contesting the award on the jurisdictional ground based on the new decree.
Petitioner opposed the appeal on June 26, 1978.
On July 17, 1978, the respondent Deputy Minister of Labor issued an Order affirming the NLRC decision but modified it by setting aside the award for moral and exemplary damages due to lack of jurisdiction.

Final Developments and Arguments on Jurisdiction

Petitioner challenged the Deputy Minister’s action, arguing that under the Labor Code (prior to the Presidential Decree), Labor Arbiters had jurisdiction over claims for moral damages arising from dismissal.
Respondent Sta. Ines, invoking Quisaba v. Sta. Ines-Melale Veneer & Plywood, defended the jurisdictional limitation, arguing that claims for damages should be filed in the regular courts.
On February 6, 1979, Sta. Ines manifested before the Court that it had fully satisfied petitioner’s financial claims (backwages and separation pay) amounting to P56,394.62.
The central controversy thus became the question of whether Labor Arbiters and the NLRC had jurisdiction to grant damages in an action based on dismissal, given that the claim included reinstatement with backwages—matters falling under employer-employee relations as per Article 217 of the Labor Code.

Issues:

Jurisdiction Over Moral and Exemplary Damages

Whether, at the time the Labor Arbiter rendered its decision (November 18, 1977) and the subsequent NLRC decision (February 21, 1978), the Labor Court had jurisdiction over claims for moral and exemplary damages arising from dismissal.
How the amendment brought by Presidential Decree No. 1367 (promulgated on May 1, 1978) affects the jurisdiction over pending cases decided when the original Labor Code was still in force.

Retroactivity and Splitting of Jurisdiction

Whether the new legislative enactment (Presidential Decree No. 1367) has retroactive effect on cases already pending and decided under the older law.
Whether treating the claim for damages as a separate cause (necessitating its filing in the regular courts) would result in “split jurisdiction,” and whether such an arrangement would be just or administratively proper.

Application of Jurisprudence

The significance of previous rulings such as Garcia v. Martinez and Quisaba v. Sta. Ines-Melale Veneer & Plywood, Inc. in resolving the appropriate forum for adjudicating claims for damages based on dismissal.
Whether damages arising directly from the termination of the employer-employee relationship should be heard by Labor Arbiters as part of its comprehensive jurisdiction over employer-employee relations under Article 217 of the Labor Code.

Ruling:

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Ratio:

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Doctrine:

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Case Digest (G.R. No. L-48706-07)
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Case Digest (G.R. No. L-48706-07)
Expanded Legal Reasoning Model