Philippine Airlines, Inc. vs. Airline Pilots Association of the Philippines

Facts:
The present case arose from a labor dispute between petitioner Philippine Airlines, Inc. (PAL) and respondent Airline Pilots' Association of the Philippines (ALPAP), a duly registered labor organization and the exclusive bargaining agent of all commercial pilots of PAL. ALPAP filed with the Department of Labor and Employment (DOLE) a notice of strike alleging that PAL committed unfair labor practice. The Secretary of DOLE (SOLE) assumed jurisdiction over the dispute and thereafter prohibited ALPAP from staging a strike and committing any act that could exacerbate the dispute.
 
Despite the prohibition by the SOLE, ALPAP staged a strike. A return-to-work order was issued by the SOLE but ALPAP defied the same and went on with their strike. The SOLE issued a resolution which declared the illegality of the strike staged by ALPAP and the loss of employment status of the officers who participated in the strike.
 
The SOLE's resolution was upheld by the CA and matter was eventually elevated to the Supreme Court. The Supreme Court dismissed ALPAP's petition for failure to show that the CA committed grave abuse of discretion or a reversible error. The resolution attained finality. Almost eight (8) months :from the finality. PAL filed before the LA a complaint for damages against ALPAP, as well as some of its officers and members.
 
The LA dismissed PAL's complaint. It ruled that it had no jurisdiction to resolve the issue on damages. It noted that the SOLE did not certify the controversy for compulsory arbitration to the NLRC nor in any occasion did the parties agree to refer the same to voluntary arbitration under Article 263(h) of the Labor Code. Hence, jurisdiction to resolve all issues arising from the labor dispute, including the claim for damages arising from the illegal strike, was left with the SOLE to the exclusion of all other fora.
 
Aggrieved, PAL elevated an appeal to the NLRC. The NLRC affirmed with modification the LA’s decision. It ruled that labor tribunals have no jurisdiction over the claims interposed by PAL. It opined that the reliefs prayed for by PAL should have been ventilated before the regular courts considering that they are based on the tortuous acts. It explained that the airline pilots' refusal to fly their assigned aircrafts constitutes breach of contractual obligation which is intrinsically a civil dispute.
 
The CA partially granted PAL's petition. It ruled that while the NLRC correctly sustained the LA's dismissal of the complaint for lack of jurisdiction, it declared that the NLRC gravely abused its discretion when it affirmed the LA's pronouncement that PAL's cause of action had already prescribed. The appellate court concurred with the NLRC's opinion that exclusive jurisdiction over PAL's claim for damages lies with the regular courts and not with the SOLE. Causes of action based on an obligation or duty not provided under the labor laws are beyond the SOLE's jurisdiction. Only those issues that arise from the assumed labor dispute, which has a direct causal connection to the employer-employee relationship between the parties, will fall under the jurisdiction of the SOLE. It pointed out that the damages caused by the willful acts of the striking pilots in abandoning their aircraft are recoverable under civil law and are thus within the jurisdiction of the regular courts.

Issue:
Whether or not the NLRC and the LA have jurisdiction over PAL’s claims against ALPAP for Damages Incurred as a Consequence of the latter’s actions during the illegal strike.
 
 Held:
Yes. Labor tribunals have jurisdiction over actions for damages arising from a labor strike. Under Article 217 [now Article 224] of the Labor Code, as amended by Section 9 of R.A. No. 6715, the LA and the NLRC have jurisdiction to resolve cases involving claims for damages arising from employer-employee relationship.
 
It is settled, however, that not every controversy or money claim by an employee against the employer or vice-versa falls within the jurisdiction of the labor arbiter. Intrinsically, civil disputes, although involving the claim of an employer against its employees, are cognizable by regular courts.
 
To determine whether a claim for damages under paragraph 4 of Article 217 is properly cognizable by the labor arbiter, jurisprudence has evolved the "reasonable connection rule" which essentially states that the claim for damages must have reasonable causal connection with any of the claims provided for in that article. 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 relations. Only if there is such a connection with the other claims can the claim for damages be considered as arising from employer-employee relations. Absent such a link, the complaint will be cognizable by the regular courts.
 
PAL's cause of action is not grounded on mere acts of quasi-delict. The claimed damages arose from the illegal strike and acts committed during the same which were in tum closely related and intertwined with the respondents' allegations of unfair labor practices against PAL.
 
Since the loss and injury from which PAL seeks compensation have reasonable causal connection with the alleged acts of unfair labor practice, a claim provided for in Article 217 of the Labor Code, the question of damages becomes a labor controversy and is therefore an employment relationship dispute.
 
From the foregoing, it is clear that the regular courts do not have jurisdiction over PAL's claim of damages, the same being intertwined with its labor dispute with the respondents over which the SOLE had assumed jurisdiction.