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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated, Labor Relations, Volume II of a 3-Volume Series 2017 Edition, 5th Revised Edition,
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G.R. No. 152121. July 29, 2003]

EDUARDO G. EVIOTA, Petitioner, vs. THE HON. COURT OF APPEALS, THE HON. JOSE BAUTISTA, Presiding Judge of Branch 136, Regional Trial Court of Makati, and STANDARD CHARTERED BANK, Respondents.



Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court, of the Decision1 of the Court of Appeals in CA-G.R. SP No. 60141 denying the petition for certiorari filed by the petitioner praying the nullification of the Order of the Regional Trial Court of Makati, Branch 136.2cräläwvirtualibräry

Sometime on January 26, 1998, the respondent Standard Chartered Bank and petitioner Eduardo G. Eviota executed a contract of employment under which the petitioner was employed by the respondent bank as Compensation and Benefits Manager, VP (M21). However, the petitioner abruptly resigned from the respondent bank barely a month after his employment and rejoined his former employer.

On June 19, 1998, the respondent bank filed a complaint against the petitioner with the RTC of Makati City. The respondent bank alleged inter alia in its complaint that:

1. It is a foreign banking institution authorized to do business in the Philippines, with principal offices at the 5th Floor, Bankmer Bldg., 6756 Ayala Avenue, Makati City.

2. Defendant Eduardo Eviota (Eviota) is a former employee of the Bank, and may be served with summons and other court processes at 8 Maple Street, Cottonwoods, Antipolo, Metro Manila.

3. On December 22, 1997, Eviota began negotiating with the Bank on his possible employment with the latter. Taken up during these negotiations were not only his compensation and benefit package, but also the nature and demands of his prospective position. The Bank made sure that Eviota was fully aware of all the terms and conditions of his possible job with the Bank.

4. On January 26, 1998, Eviota indicated his conformity with the Banks Offer of Employment by signing a written copy of such offer dated January 22, 1998 (the Employment Contract). A copy of the Employment Contract between Eviota and the Bank is hereto attached as Annex A.

5. Acting on the Employment Contract and on Eviotas uninhibited display of interest in assuming his position, the Bank promptly proceeded to carry out the terms of the Employment Contract as well as to facilitate his integration into the workforce. Among others, the Bank: (a) renovated and refurbished the room which was to serve as Eviotas office; (b) purchased a 1998 Honda CR-V (Motor No. PEWED7P101101; Chassis No. PADRD 1830WV00108) for Eviotas use; (c) purchased a desktop IBM computer for Eviotas use; (d) arranged the takeout of Eviotas loans with Eviotas former employer; (e) released Eviotas signing bonus in the net amount of P300,000.00; (f) booked Eviotas participation in a Singapore conference on Y2K project scheduled on March 10 and 11, 1998; and (g) introduced Eviota to the local and regional staff and officers of the Bank via personal introductions and electronic mail.

6. The various expenses incurred by the Bank in carrying out the above acts are itemized below, as follows:

a. Signing Bonus P 300,000.00

b. 1 Honda CR-V 800,000.00

c. IBM Desktop Computer 89,995.00

d. Office Reconfiguration 29,815.00

e. 2-Drawer Lateral File

Cabinet 13,200.00

f. 1 Officers Chair 31,539.00

g. 1 Guest Chair 2,200.00

h. 1 Hanging Shelf 2,012.00

i.                          Staff Loan Processing

Title Verification 375.00

Cost of Appraisal

Housing Loan 3,500.00

TOTAL P1,272,636.00

An itemized schedule of the above expenses incurred by the Bank is hereto attached as Annex B.

7. On February 25, 1998, Eviota assumed his position as Compensation and Benefits Manager with the Bank and began to discharge his duties. At one Human Resources (HR) Committee meeting held on March 3, 1998, Eviota energetically presented to senior management his projects for the year, thus raising the latters expectations. The same day, Eviota instructed the Banks HR Administrator to book him a flight for Singapore, where he was scheduled to participate in a Y2K project on March 10 and 11, 1998. Confident of Eviotas professed commitment to the Bank, the latter made the aforementioned airline booking for him. In addition, the Bank allowed Eviota access to certain sensitive and confidential information and documents concerning the Banks operations.

8. After leading the Bank to believe that he had come to stay, Eviota suddenly resigned his employment with immediate effect to re-join his previous employer. His resignation, which did not comply with the 30-day prior notice rule under the law and under the Employment Contract, was so unexpected that it disrupted plans already in the pipeline (e.g., the development of a salary/matrix grid and salary structure, and the processing of merit promotion recommendations), aborted meetings previously scheduled among Bank officers, and forced the Bank to hire the services of a third party to perform the job he was hired to do. For the services of this third party, the Bank had to pay a total of P208,807.50. A copy of a receipt for the above expenses is hereto attached as Annex C (See also, Annex B).

9. Aside from causing no small degree of chaos within the Bank by reason of his sudden resignation, Eviota made off with a computer diskette and other papers and documents containing confidential information on employee compensation and other Bank matters, such as the salary schedule of all Corporate and Institutional Banking officers and photocopies of schedules of benefits provided expatriates being employed by the Bank.

10. With the benefit of hindsight, the Bank realizes that it was simply used by Eviota as a mere leverage for his selfish efforts at negotiating better terms of employment with his previous employer. Worse, there is evidence to show that in his attempts to justify his hasty departure from the Bank and conceal the real reason for his move, Eviota has resorted to falsehoods derogatory to the reputation of the Bank. In particular, he has been maliciously purveying the canard that he had hurriedly left the Bank because it had failed to provide him support. His untruthful remarks have falsely depicted the Bank as a contract violator and an undesirable employer, thus damaging the Banks reputation and business standing in the highly competitive banking community, and undermining its ability to recruit and retain the best personnel in the labor market.

11. On March 16, 1998, the Bank made a written demand on Eviota to return the aforementioned computer diskette and other confidential documents and papers, reimburse the Bank for the various expenses incurred on his account as a result of his resignation (with legal interest), and pay damages in the amount of at least P500,000.00 for the inconvenience and work/program disruptions suffered by the Bank.

A copy of the Banks demand letter dated March 16, 1998 is hereto attached as Annex D.

12. In partial compliance with said demand, Eviota made arrangements with his previous employer to reimburse the Bank for the expenses incurred in connection with the Banks purchase of the Honda CR-V for his use. The Bank informed Eviota that in addition to the Honda CR-Vs purchase price of P848,000.00 (of which Eviota initially shouldered P48,000.00), incidental costs in the form of Processing Fees (P1,000.00), FPD/MCAR/98-155684 (P1,232.53) and Fund Transfer Price (P18,646.84) were incurred, bringing the total cost of the Honda CR-V to P868,881.38. On April 29, 1998, the Bank received two managers checks in the aggregate amount of P868,881.38, representing costs incurred in connection with the purchase of the Honda CR-V, inclusive of processing fees and other incidental costs. Previously, Eviota had returned his P300,000.00 signing bonus, less the P48,000.00 he had advanced for the Honda CR-Vs purchase price.

13. Eviota never complied with the Banks demand that he reimburse the latter for the other expenses incurred on his account, amounting to P360,562.12 (see, Annex B).3cräläwvirtualibräry

The respondent bank alleged, by way of its causes of action against the petitioner, the following:

First Cause of Action

14. Eviotas actions constitute a clear violation of Articles 19, 20 and 21 of Republic Act No. 386, as amended (the Civil Code). Assuming arguendo that Eviota had the right to terminate his employment with the Bank for no reason, the manner in and circumstances under which he exercised the same are clearly abusive and contrary to the rules governing human relations.

14.1. By his actions and representations, Eviota had induced the Bank to believe that he was committed to fulfilling his obligations under the Employment Contract. As a result, the Bank incurred expenses in carrying out its part of the contract (see Annexes B and C). Less reimbursements received from Eviota, the Bank is entitled to actual damages of P360,562.12. (See, Annex C).

Second Cause of Action

15. Under Article 285 (a) of Presidential Decree No. 442, as amended (the Labor Code), an employee may terminate without just cause the employer-employee relationship by serving written notice on the employer at least one (1) month in advance. In addition, Section 13 of the Employment Contract specifically provides that: Your [i.e., Eviotas] employment may be terminated by either party giving notice of at least one month. (Annex A, p. 5.)

15.1. Eviotas failure to comply with the above requirement threw a monkey wrench into the Banks operations Eviotas sudden resignation aborted meetings previously scheduled among Bank officers and disrupted plans for a salary/merit review program and development of a salary structure and merit grid already in the pipeline.

Hence, Eviota is liable to the Bank for damages in the amount of at least P100,000.00.

Third Cause of Action

16. Eviotas false and derogatory statements that the Bank had failed to deliver what it had purportedly promised have besmirched the Banks reputation and depicted it as a contract violator and one which does not treat its employees properly. These derogatory statements have injured the Banks business standing in the banking community, and have undermined the Banks ability to recruit and retain the best personnel. Hence, plaintiff is entitled to moral damages of at least P2,000,000.00.

17. By way of example or correction for the public good, and to deter other parties from committing similar acts in the future, defendant should be held liable for exemplary damages of at least P1,000,000.00

18. Eviotas actions have compelled plaintiff to obtain the services of undersigned counsel for a fee, in order to protect its interests. Hence, plaintiff is entitled to attorneys fees of at least P200,000.00.4cräläwvirtualibräry

The respondent bank prayed, that after due proceedings, judgment be rendered in its favor as follows:

WHEREFORE, it is respectfully prayed that judgment be rendered ordering the defendant to pay the plaintiff:

1. As actual damages, the amount of P360,562.12, representing expenses referred to in items c to i of par. 6 and the cost of the third-party services mentioned in par. 8;

2. For violating the 30-day notice requirement under the Labor Code and order (sic) the Employment Contract, damages in the amount of at least P100,000.00;

3. As moral damages, the amount of P2,000,000.00;

4. As exemplary damages, the amount of P1,000,000.00;

5. As attorneys fees, the amount of P200,000.00; and

6. Costs of the suit.

Other just and equitable reliefs are likewise prayed for.5cräläwvirtualibräry

The respondent bank appended to its complaint a copy of the petitioners employment contract.

The petitioner filed a motion to dismiss the complaint on the ground that the action for damages of the respondent bank was within the exclusive jurisdiction of the Labor Arbiter under paragraph 4, Article 217 of the Labor Code of the Philippines, as amended. The petitioner averred that the respondent banks claim for damages arose out of or were in connection with his employer-employee relationship with the respondent bank or some aspect or incident of such relationship. The respondent bank opposed the motion, claiming that its action for damages was within the exclusive jurisdiction of the trial court. Although its claims for damages incidentally involved an employer-employee relationship, the said claims are actually predicated on the petitioners acts and omissions which are separately, specifically and distinctly governed by the New Civil Code.

On November 29, 1999, the trial court issued an order denying the petitioners motion to dismiss, ratiocinating that the primary relief prayed for by the respondent bank was grounded on the tortious manner by which the petitioner terminated his employment with the latter, and as such is governed by the New Civil Code:

The Court holds that here, since the primary relief prayed for by the plaintiff is for damages, grounded on the tortious manner by which the defendant terminated his employment with the company, the same are recoverable under the applicable provision of the Civil Code, the present controversy is removed from the jurisdiction of the Labor Arbiter and brings in within the purview of the regular courts.6cräläwvirtualibräry

The petitioner filed a motion for reconsideration of the said order, but the court issued an order denying the same. The petitioner filed a petition for certiorari with the Court of Appeals for the nullification of the orders of the trial court, alleging that the court a quo committed grave abuse of its discretion amounting to excess or lack of jurisdiction in issuing the said orders. The petitioner further asserted that contrary to the ruling of the court, the respondent bank claimed damages in its complaint against the petitioner based on his employment contract, and not on tortious acts.

On November 15, 2001, the CA promulgated a decision dismissing the petition, holding that the trial court and not the Labor Arbiter had exclusive jurisdiction over the action of the respondent bank. It held that the latters claims for damages were grounded on the petitioners sudden and unceremonious severance of his employment with the respondent bank barely a month after assuming office.

With his motion for reconsideration of the decision having been denied by the CA, the petitioner filed his petition with this Court contending that:

Suffice to state immediately that on the basis of the allegations in the complaint, it is the Labor Arbiter, not the Regional Trial Court, which has jurisdiction of the subject matter of the complaint in Civil Case No. 98-1397, the principal cause of action being the alleged omission of petitioner in giving notice to the respondent Bank employer of termination of their relationship; whereas the claims for other actual/moral/exemplary damages are well within the competence of the Labor Arbiter.7cräläwvirtualibräry

The petition is barren of merit.

Article 217 of the Labor Code of the Philippines, as amended by Rep. Act No. 6715 which took effect on March 21, 1989 reads:

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.

Case law has it that the nature of an action and the subject matter thereof, as well as which court has jurisdiction over the same, are determined by the material allegations of the complaint and the reliefs prayed for in relation to the law involved.

Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter. A money claim by a worker against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter only if there is a reasonable causal connection between the claim asserted and employee-employer relation. Absent such a link, the complaint will be cognizable by the regular courts of justice.8cräläwvirtualibräry

Actions between employees and employer where the employer-employee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court.9 In Georg Grotjahn GMBH & Co. v. Isnani,10 we held that the jurisdiction of the Labor Arbiter under Article 217 of the Labor Code, as amended, is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code of the Philippines, other labor laws or their collective bargaining agreements. In Singapore Airlines Limited v. Pao,11 the complaint of the employer against the employee for damages for wanton justice and refusal without just cause to report for duty, and for having maliciously and with bad faith violated the terms and conditions of their agreement for a course of conversion training at the expense of the employer, we ruled that jurisdiction over the action belongs to the civil court:

On appeal to this court, we held that jurisdiction over the controversy belongs to the civil courts. We stated that the action was for breach of a contractual obligation, which is intrinsically a civil dispute. We further stated that while seemingly the cause of action arose from employer-employee relations, the employers claim for damages is grounded on wanton failure and refusal without just cause to report to duty coupled with the averment that the employee maliciously and with bad faith violated the terms and conditions of the contract to the damage of the employer. Such averments removed the controversy from the coverage of the Labor Code of the Philippines and brought it within the purview of the Civil Law.

Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to be cognizable by the Labor Arbiter, must have a reasonable causal connection with any of the claims provided for in that article. Only if there is such a connection with the other claims can the claim for damages be considered as arising from employer-employee relations.12cräläwvirtualibräry

The claims were the natural consequences flowing from a breach of an obligation, intrinsically civil in nature.

In Medina v. Castro-Bartolome,13 we held that a complaint of an employee for damages against the employer for slanderous remarks made against him was within the exclusive jurisdiction of the regular courts of justice because the cause of action of the plaintiff was for damages for tortious acts allegedly committed by the employer. The fact that there was between the parties an employer-employee relationship does not negate the jurisdiction of the trial court.

In Singapore Airlines Ltd. v. Pao,14 we held that:

Stated differently, petitioner seeks protection under the civil laws and claims no benefits 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 benefits 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 Dai-Chi Electronics Manufacturing Corporation v. Villarama, Jr.,15 the petitioner sued its employee Adonis Limjuco for breach of contract which reads:

That for a period of two (2) years after termination of service from EMPLOYER, EMPLOYEE shall not in any manner be connected, and/or employed, be a consultant and/or be an informative body directly or indirectly, with any business firm, entity or undertaking engaged in a business similar to or in competition with that of the EMPLOYER.16cräläwvirtualibräry

The petitioner alleged in its complaint with the trial court that:

Petitioner claimed that private respondent became an employee of Angel Sound Philippines Corporation, a corporation engaged in the same line of business as that of petitioner, within two years from January 30, 1992, the date of private respondents resignation from petitioners employ. Petitioner further alleged that private respondent is holding the position of Head of the Material Management Control Department, the same position he held while in the employ of petitioner.17cräläwvirtualibräry

The trial court dismissed the case for lack of jurisdiction over the subject matter because the cause of action for damages arose out of the parties employer-employee relationship. We reversed the order of the trial court and held, thus:

Petitioner does not ask for any relief under the Labor Code of the Philippines. It seeks to recover damages agreed upon in the contract as redress for private respondents breach of his contractual obligation to its damage and prejudice (Rollo, p. 57). Such cause of action is within the realm of Civil Law, and jurisdiction over the controversy belongs to the regular courts. More so when we consider that the stipulation refers to the post-employment relations of the parties.18cräläwvirtualibräry

In this case, the private respondents first cause of action for damages is anchored on the petitioners employment of deceit and of making the private respondent believe that he would fulfill his obligation under the employment contract with assiduousness and earnestness. The petitioner volte face when, without the requisite thirty-day notice under the contract and the Labor Code of the Philippines, as amended, he abandoned his office and rejoined his former employer; thus, forcing the private respondent to hire a replacement. The private respondent was left in a lurch, and its corporate plans and program in jeopardy and disarray. Moreover, the petitioner took off with the private respondents computer diskette, papers and documents containing confidential information on employee compensation and other bank matters. On its second cause of action, the petitioner simply walked away from his employment with the private respondent sans any written notice, to the prejudice of the private respondent, its banking operations and the conduct of its business. Anent its third cause of action, the petitioner made false and derogatory statements that the private respondent reneged on its obligations under their contract of employment; thus, depicting the private respondent as unworthy of trust.

It is evident that the causes of action of the private respondent against the petitioner do not involve the provisions of the Labor Code of the Philippines and other labor laws but the New Civil Code. Thus, the said causes of action are intrinsically civil. There is no causal relationship between the causes of action of the private respondents causes of action against the petitioner and their employer-employee relationship. The fact that the private respondent was the erstwhile employer of the petitioner under an existing employment contract before the latter abandoned his employment is merely incidental. In fact, the petitioner had already been replaced by the private respondent before the action was filed against the petitioner.

IN LIGHT OF ALL THE FOREGOING, the Petition is DENIED. The Decision of the Court of Appeals dismissing the petition of the petitioner is AFFIRMED.


Bellosillo, (Chairman), Austria-Martinez, and Tinga, JJ., concur.

Quisumbing, J., on official leave.


1 Penned by Associate Justice Romeo A. Brawner, with Associate Justices Elvi John S. Asuncion and Juan Q. Enriquez, Jr. concurring.

2 Civil Case No. 98-1397 entitled Standard Chartered Bank v. Eduardo G. Eviota. The said order denied the petitioners motion to dismiss.

3 Rollo, pp. 32-36.

4 Id. at 36-37.

5 Id. at 37-38.

6 Id. at 55.

7 Id. at 9.

8 Pepsi Cola Distributors of the Philippines, Inc. v. Gal-lang, 201 SCRA 695 (1991).

9 Baez v. Valdevilla, 331 SCRA 584 (2000).

10 235 SCRA 216 (1994).

11 122 SCRA 671 (1983).

12 Dai-Chi Electronics Manufacturing Corp. v. Villarama, Jr., 238 SCRA 267 (1994).

13 116 SCRA 597 (1982).

14 Supra.

15 Supra.

16 See note 11, p. 268.

17 Id. at 269.

18 Id. at 270.


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