SECOND DIVISION

[G.R. No. 241865. February 19, 2020.]

TRIFON B. TUMAODOS, petitioner, vs. SAN MIGUEL

YAMAMURA PACKAGING CORPORATION, respondent.

DECISION

INTING, J : p

Before the Court is a Petition for Review 1 under Rule 45 of the Rules of
Court assailing the Decision 2 dated August 9, 2017 and the Resolution 3
dated April 19, 2018 of the Court of Appeals (CA) in CA-G.R. SP No. 10322.
The assailed Decision granted the petition for certiorari filed by San Miguel
Yamamura Packaging Corporation (respondent), and nullified and set aside
the Decision 4 dated March 1, 2016 and the Resolution 5 dated May 18, 2016
of the National Labor Relations Commission (NLRC) in NLRC Case No. VAC-
02-000081-2016 as well as all other issuances and proceedings rendered in
the same case.
The assailed Resolution, on the other hand, denied the Motion for
Reconsideration 6 filed by Trifon B. Tumaodos (petitioner).

The Antecedents

Petitioner became an employee of respondent on October 6, 1988. As

an employee of respondent, petitioner became a member of SMC Employees
& Its Subsidiaries Multi-Purpose Cooperative (Cooperative). 7
Due to its plant reorganization, respondent implemented an
Involuntary Separation Program effective November 15, 2014. 8 Petitioner
was one of the employees who availed himself of the program. His
separation package was computed at P3,080,244.66, but respondent
withheld the amount of P1,400,000.00 on behalf of the Cooperative, to which
petitioner allegedly had an outstanding indebtedness. 9
On October 13, 2014, respondent paid out petitioner's separation
benefits, less the amount withheld. Petitioner signed a Receipt and Release
in favor of respondent, but he made a notation that the amount of
P1,400,000.00 was still subject to verification. 10
On November 28, 2014, respondent received a letter from petitioner
wherein he claimed that he no longer had any outstanding obligation to the
Cooperative. Thus, petitioner demanded respondent to release to him the
withheld amount. On February 13, 2015, respondent also received a letter
from the Cooperative, disputing petitioner's assertions and also claiming
entitlement to the withheld amount.
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 Due to petitioner's and the Cooperative's conflicting claims,
respondent, on March 17, 2015, filed a Complaint for interpleader with
Consignation before Branch 55, Regional Trial Court (RTC), Mandaue City. 11
Meanwhile, on April 22, 2015, petitioner filed a complaint before the
NLRC Regional Arbitration Branch No. VII for non-payment of separation pay
and damages. The case was docketed as NLRC RAB VII 04-1000-15. 12
Considering that settlements failed, the Labor Arbiter (LA) directed the
parties to simultaneously file their respective position papers. 13
In the [Petitioner's] Position Paper, 14 petitioner alleged that on March
13, 2007, he applied for an ordinary loan with the Cooperative in the amount
of P250,000.00. When the loan was granted, respondent had been deducting
from his salary the amount of P5,091.00 per payday, or a total of P10,182.00
per month, even though he had not so authorized respondent to make
deductions for the payment of his loan with the Cooperative. Deductions
were made from petitioner's salary since March 2007 until June 2011, when
respondent allegedly noticed certain anomalous and unscrupulous practices
of the Cooperative. For this reason, respondent issued a Memorandum 15
dated June 23, 2011 informing the Cooperative that it would no longer
accommodate deductions on the employees' payrolls. 16
Petitioner claimed that respondent made deductions totaling
P529,464.00, which was more than double the sum that he owed to the
Cooperative. He averred that he had not only paid his loan in full but had
made excess payment in the amount of P279,464.00, which respondent
must return. 17
Petitioner further alleged that sometime in the early part of 2011, he
applied for a loan with Home Development and Mutual Fund (Pag-IBIG). As a
requirement for the Pag-IBIG loan, he requested for a Certificate of
Employment and Compensation from respondent. However, the Human
Resource (HR) Manager refused to issue the document unless petitioner
would sign what appeared, then, to be a blank form, but later turned out to
be an Authority to Deduct. Petitioner signed the form in order that he could
obtain the required employment certificate. 18
Anent the deduction of P1,400,000.00 from his separation pay,
petitioner alleged that respondent merely relied on the purported Authority
to Deduct without seeing the loan documents or determining his total
obligations. Petitioner asserted that the Authority to Deduct had suspicious
discrepancies; that the loans reflected therein were fictitious and fabricated;
and that the Cooperative and the HR Manager took advantage of the existing
deductions from petitioner's salary to make it appear that petitioner
obtained a loan from the Cooperative, when in truth, he did not. Petitioner
averred that the Cooperative could not have known about the P5,091.00
deduction in his salary, unless respondent connived with it in disclosing such
amount and allowed it to unduly "piggyback" on the same deduction as if it
were in payment of the alleged fictitious loans appearing in the Authority to
Deduct. 19
For its part, respondent alleged in its Position Paper 20 that it had a
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 long-standing agreement with the Cooperative, whereby it undertook to
deduct the amount of monthly amortizations from the salary of the
employees who were members of the Cooperative, subject to the company's
policies on deduction. 21 This agreement was formalized in the Memorandum
of Agreement (MOA) 22 dated May 14, 2013. After the execution of the MOA,
the Cooperative submitted to the HR Department several Authorities to
Deduct signed by the employee-members concerned, including petitioner, to
effect the implementation of the payroll deductions. 23 In view of such
authority from the employees and due to its obligations under the MOA to
make the subject deductions, respondent withheld a portion of petitioner's
separation pay. 24
Petitioner, however, asserted that he no longer had any obligation to
the Cooperative. He thus demanded the release of the withheld amount. At
the same time, the Cooperative also claimed entitlement to the same
amount and invoiced the provisions of the MOA and the Cooperative Code of
the Philippines. Moreover, the Cooperative filed a complaint for collection of
sum of money before the Cooperative Development Authority Voluntary
Arbitration Secretariat in relation to petitioner's alleged outstanding
obligations to it.
Respondent averred that it acted in good faith when it withheld the
sum supposedly due to petitioner or to the Cooperative in the hope of
determining who between the two is entitled to such amount. 25
On October 29, 2015, the LA rendered a Decision, 26 the dispositive
portion of which reads:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby
rendered ordering the respondent corporation SAN MIGUEL
YAMAMURA PACKAGING CORPORATION to pay complainant the
following:

Refund of the deductions since P529,464.00

March 2007
Separation Pay Withheld P1,400,000.00
Plus 6% interest P115,767.84
Moral Damages P50,000.00
Exemplary Damages P30,000.00
–––––––––––––
P2,125,231.84
10% Attorney's Fees P212,523.18

Or in the total aggregate sum of TWO MILLION THREE HUNDRED

THIRTY SEVEN THOUSAND SEVEN HUNDRED FIFTY FIVE PESOS AND
2/100 (P2,337,755.02)[.]
Other claims are denied for lack of merit and basis.
SO ORDERED. 27

Respondent appealed to the NLRC. It posted the full amount of the

judgment award but subsequently moved to reduce the required bond on the
ground that the amount of P1,400,000.00 had already been consigned
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 before the RTC in connection with the Complaint for Interpleader with
Consignation it previously filed. 28
On March 1, 2016, the NLRC rendered its Decision 29 affirming the
ruling of the LA. On March 18, 2016, the NLRC issued a Resolution 30 which
merely noted the motion to reduce bond. 31 Subsequently, in the Resolution
32 dated May 18, 2016, the NLRC denied respondent's motion for

reconsideration with respect to both its Decision and its inaction on the
motion to reduce bond.
Aggrieved, respondent filed a petition for certiorari with the CA.
Respondent contended, among others, that the NLRC committed grave
abuse of discretion amounting to lack or excess of jurisdiction when it held
that the LA had jurisdiction over the case, notwithstanding the fact that
petitioner's asserted claim has no reasonable causal connection with the
employer-employee relationship, and that the ultimate issue at hand is the
validity or authority to deduct or the lack thereof which should be brought
before the RTC. 33 Respondent also averred that the interpleader case was
filed prior to the labor case and was the more appropriate action; hence, the
labor case should be dismissed and the resolution of the issue should be
deferred to the RTC in which the interpleader case was pending. 34
Respondent further argued that the NLRC committed grave abuse of
discretion when it affirmed the order for the refund of P529,464.00,
notwithstanding that it is contrary to the principle of unjust enrichment and
that petitioner was already barred by estoppel. 35
In resolving the petition for certiorari, the CA particularly concentrated
on the issue of whether the labor tribunals had jurisdiction to resolve the
instant case. Answering in the negative, the CA ruled that the issues raised
and the reliefs prayed for by petitioner in his position paper are not
cognizable by the labor tribunals. 36 The dispositive portion of the CA
assailed Decision dated August 9, 2017 reads:
WHEREFORE, the Petition is GRANTED. The Decision and
Resolution dated March 1, 2016 and May 18, 2016, respectively, as
well as all other issuances and proceedings rendered in NLRC Case
No. VAC-02-000081-2016, are NULLIFIED and SET ASIDE.
SO ORDERED. 37

The CA found that petitioner was not seeking to enforce his rights
under the Labor Code, other labor statutes, or any collective bargaining
agreement, and his claims could not be resolved by referring to labor law
provisions. 38 On the contrary, the CA held that the money claim presented
before the labor tribunal relates, on the one hand, to petitioner's supposed
financial obligations to the Cooperative, if there were still any; and on the
other hand, to respondent's contractual obligation to the Cooperative
pursuant to the MOA provision wherein respondent undertook to deduct any
unpaid loan balances from the final pay of the borrower-employee in the
event of his/her retirement, resignation, or termination. 39 To the CA, the
determination of these matters does not require the expertise in labor
management relations, wage structures or other terms and conditions of
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 employment; rather, it entails the application of civil law, particularly on
obligations and contracts. 40
Hence, this petition.

Assignment of Errors

I
AS A MATTER OF LAW, LABOR COURTS HAVE JURISDICTION OVER,
AND THE AUTHORITY TO AWARD, EMPLOYMENT BENEFITS SUCH AS
SEPARATION PAY. THUS, THE COURT OF APPEALS GRAVELY ERRED
WHEN IT HELD THAT THE LABOR COURT HAS NO JURISDICTION OVER
THE SUBJECT MATTER.
II
THE HONORABLE COURT ERRED WHEN IT HELD THAT THE ISSUES IN
THIS CASE DO NOT REQUIRE THE APPLICATION OF ANY LABOR LAWS.
41

The Court's Ruling

The petition is bereft of merit.

In cases involving workers and their employers, the delineation
between the jurisdiction of the regular courts and that of the labor courts has
always been a matter of dispute. 42 In this case, the Court agrees with the
CA that it is the regular courts that have jurisdiction over petitioner's claims.
Not all controversies or money claims by an employee against the
employer or vice versa fall within the exclusive jurisdiction of the LA. 43 With
regard to money claims and damages, Article 224 (formerly Article 217) of
the Labor Code, as amended, bestows upon the LA original and exclusive
jurisdiction over cases filed by workers involving wages, among others, if
accompanied by a claim for reinstatement; 44 all claims, except those for
Employees Compensation, Social Security, Medicare and maternity benefits,
arising from employer-employee relations involving an amount exceeding
P5,000.00 regardless of whether accompanied with a claim for
reinstatement; 45 and claims for actual, moral, exemplary and other forms of
damages arising from employer-employee relations. 46
As can be gleaned above, the jurisdiction of the LA over money claims
and damages is confined to those cases which are either accompanied by a
claim for reinstatement or arising from employer-employee relations. Here,
the Court finds that petitioner's claims do not fall under any of these cases.
In ruling that the determination of the case is beyond the competence
of the labor tribunals, the CA found that although employment relations
existed between respondent and petitioner, and the subject of the complaint
before the LA was petitioner's money claims against respondent, such
money claims did not involve and did not arise out of such employment
relationship. 47 Hence, the CA held that the jurisdiction over petitioner's
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 claims belonged to the RTC, and not the labor tribunals.
The Court agrees.
In Indophil Textile Mills, Inc. v. Engr. Adviento, 48 the Court declared:
While we have upheld the present trend to refer worker-
employer controversies to labor courts in light of the aforequoted
provision, we have also recognized that not all claims involving
employees can be resolved solely by our labor courts, specifically
when the law provides otherwise. For this reason, we have formulated
the "reasonable causal connection rule," wherein if there is a
reasonable causal connection between the claim asserted and the
employer-employee relations, then the case is within the jurisdiction
of the labor courts, and in the absence thereof, it is the regular courts
that have jurisdiction. Such distinction is apt since it cannot be
presumed that money claims of workers which do not arise out of or
in connection with their employer-employee relationship, and which
would therefore fall within the general jurisdiction of the regular
courts of justice, were intended by the legislative authority to be
taken away from the jurisdiction of the courts and lodged with Labor
Arbiters on an exclusive basis. 49
To the Court, petitioner's claims have no "reasonable causal
connection" with his employment relationship with respondent. It bears to
point out that the case that petitioner filed was neither a complaint for illegal
dismissal nor a claim for reinstatement. His complaint was for alleged non-
payment of separation benefits and damages. It is notable, however, that
respondent never denied petitioner's entitlement to his separation pay. In
fact, on October 13, 2014, respondent paid out petitioner's separation
package, except that it withheld the amount of P1,400,000.00, which,
purportedly, was his outstanding indebtedness to the Cooperative. 50
Petitioner, in turn, signed a Receipt and Release in favor of respondent but
made a notation that the amount of P1,400,000.00 was still subject to
verification. 51 Thus, by signing the Receipt and Release, petitioner had in
fact acknowledged that he had been paid all amounts due him comprising
his separation benefits, except that he questioned the withholding of the
P1,400,000.00 as he claimed that he no longer had existing loan obligations
to the Cooperative. It appears, thus, that the principal relief sought by
petitioner in his complaint was not the payment of his separation package
but the release to him of the withheld amount of P1,400,000.00, to which
both he and the Cooperative claimed entitlement. In addition, he also sought
the return of the alleged excess deductions made for his 2007 loan in the
amount of P279,464.00.
Ergo, given that the disputed amount of P1,400,000.00 and the alleged
excess deductions of P279,464.00 both relate to petitioner's alleged
indebtedness to the Cooperative and not to respondent, it becomes apparent
that the controversy involves debtor-creditor relations between petitioner
and the Cooperative, rather than employer-employee relations between
respondent and petitioner. Evidently, the employer-employee relationship
between respondent and petitioner in this case is merely incidental and the
principal relief sought by petitioner can be resolved not by reference to the
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 Labor Code or other labor relations statute or a collective bargaining
agreement but by the general civil law.
Thus, as held in Halagueña, et al. v. PAL, Inc.: 52

Not every controversy or money claim by an employee against

the employer or vice-versa is within the exclusive jurisdiction of the
labor arbiter. 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. Here, the employer-
employee relationship between the parties is merely incidental and
the cause of action ultimately arose from different sources of
obligation, i.e., the Constitution and CEDAW.
Thus, where the principal relief sought is to be resolved not by
reference to the Labor Code or other labor relations statute or a
collective bargaining agreement but by the general civil law, the
jurisdiction over the dispute belongs to the regular courts of justice
and not to the labor arbiter and the NLRC. In such situations,
resolution of the dispute requires expertise, not in labor management
relations nor in wage structures and other terms and conditions of
employment, but rather in the application of the general civil law.
Clearly, such claims fall outside the area of competence or expertise
ordinarily ascribed to labor arbiters and the NLRC and the rationale
for granting jurisdiction over such claims to these agencies
disappears. 53
Here, since both petitioner and the Cooperative claimed entitlement to
the withheld amount of P1,400,000.00, respondent appropriately filed a
Complaint for Interpleader with Consignation before Branch 55 of the RTC of
Mandaue City. Under Section 1, Rule 62 of the Rules of Court, a person may
file a special civil action for interpleader if conflicting claims are made
against him/her/it over a subject matter in which he/she/it has no interest.
The action is brought against the claimants to compel them to litigate their
claims among themselves. Section 1, Rule 62 of the Rules of Court provides:
SECTION 1. When interpleader proper. — Whenever
conflicting claims upon the same subject matter are or may be made
against a person who claims no interest whatever in the subject
matter, or an interest which in whole or in part is not disputed by the
claimants, he may bring an action against the conflicting claimants to
compel them to interplead and litigate their several claims among
themselves.
It bears emphasis that the interpleader case before the RTC was filed
prior to petitioner's filing of his complaint before the LA. The fact that
respondent filed the interpleader case is even an indication of good faith on
its part as both petitioner and the Cooperative would be given the right to
have their respective claims ventilated before the court. Contrarily, the
Cooperative who is not a party to the labor complaint before the LA would
not have the opportunity to oppose or refute petitioner's unilateral claims
therein. In addition, the fact that respondent had consigned the amount of
P1,400,000.00 in the RTC where the interpleader case was pending
demonstrates the lack of intention on its part to deprive petitioner of such
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 amount, if he was indeed the one entitled to it.
Moreover, it is also worthy to mention that neither petitioner nor
respondent presented before the LA the purported loan agreement between
petitioner and the Cooperative. 54 To the Court, given that the disputed sum
of P1,400,000.00 pertained to the alleged outstanding loan obligation of
petitioner to the Cooperative, it was necessary that all documents pertinent
thereto, most especially the loan agreement itself, be presented before the
adjudicating body, assessed, and taken into consideration in determining
who is entitled to the amount contested. As correctly submitted by
respondent in his Comment 55 to the petition, a just resolution of petitioner's
complaint cannot be done without affording the Cooperative a fair and equal
opportunity to prove its entitlement to the amount of P1,400,000.00. 56
Thus, the CA aptly ruled:
When the Corporation filed its Position Paper, it wasted no time
to inform the labor arbiter that prior to Tumaodos' filing of his money
claim complaint, there was already an Interpleader with Consignation
case before the RTC, since the amount subject of Tumaodos' money
claim was also being claimed by the Cooperative. This fact should
have cautioned the [LA], and later the NLRC, that the subject matter
of the case is beyond their competence.
Noteworthy, Tumaodos himself admitted being a member of the
Cooperative and having incurred a loan therefrom in 2007.
Considering these circumstances, the determination of Tumaodos'
entitlement to the amount he was claiming could not, and should not
just be made to rest on his bare allegation. Instead, the adjudicating
body should entail the presentation of loan documents, payment
slips, and other documents to support Tumaodos' and the
Cooperative's respective claims. The [LA] and the NLRC's area of
competence or expertise simply do not encompass these matters;
hence, the said labor tribunals should have prudently dismissed the
case and yielded to the jurisdiction of the RTC. x x x 57
The Court also finds that the LA and the NLRC erred in ordering the
refund to petitioner of the amount of P529,464.00, the total deductions on
his salary which started in March 2007. According to petitioner, respondent
made total deductions amounting to P529,464.00 and he had made an
excess payment of P279,464.00, which respondent must return. Thus,
petitioner had in fact admitted that he was indebted to the Cooperative but
only for the amount of P250,000.00; yet, the LA and the NLRC both found
proper the refund of P529,464.00 based on their conclusion that this whole
amount constituted an illegal deduction on his salary. In any case, the Court
finds that the refund of either P529,464.00 or P279,464.00 has no sufficient
basis. To reiterate, the presentation of all pertinent loan documents is
necessary in order to arrive at a complete and just resolution of the case.
Apparently, this cannot be possible in this labor complaint filed by petitioner
against respondent considering that the Cooperative is not afforded the
opportunity to present its own evidence and the determination of the case
would be based merely on the unilateral claims of petitioner.
In sum, the determination of petitioner's case is beyond the
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 competence of the labor tribunals for the following reasons: 1) petitioner's
claims have no reasonable causal connection with his employment
relationship with respondent; 2) the Cooperative is not a party to the labor
complaint and would therefore be deprived of the opportunity to plead its
claims; and 3) the Interpleader with Consignation case before the RTC, which
was filed by respondent prior to petitioner's labor complaint, was the proper
forum to ventilate the claimants' respective claims over the disputed amount
of P1,400,000.00.
WHEREFORE, the Petition for Review is DENIED. The Decision dated
August 9, 2017 and the Resolution dated April 19, 2018 of the Court of
Appeals in CA-G.R. SP No. 10322 are AFFIRMED.
SO ORDERED.
Perlas-Bernabe, A.B. Reyes, Jr., Hernando and Gaerlan, * JJ., concur.

Footnotes
* Designated additional member per Raffle dated February 10, 2020 in lieu of
Associate Justice Edgardo L. Delos Santos (now a member of the Court).
1. Rollo , pp. 13-39.
2. Id. at 43-54; penned by Associate Justice Edward B. Contreras with Associate
Justices Gabriel T. Ingles and Edgardo L. Delos Santos (now a member of the
Court), concurring.
3. Id. at 55-56.
4. Id. at 268-278; penned by Presiding Commissioner Violeta Ortiz-Bantug with
Commissioners Julie C. Rendoque and Jose G. Gutierrez, concurring.
5. Id. at 279-280.
6. Id. at 57-66.
7. Id. at 43-44.

8. Id. at 283.
9. Id. at 44.
10. Id.
11. Id.
12. Id. at 281.

13. Id. at 44.

14. Id. at 293-309.
15. Id. at 319.
16. Id. at 294-295.

17. Id. at 295-296.

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 18. Id. at 296.
19. Id. at 298.
20. Id. at 366-376.
21. Id. at 368.

22. Id. at 379-383.

23. Id. at 368.
24. Id. at 369.
25. Id. at 370.
26. Id. at 281-292; penned by Labor Arbiter Butch Donabel Ragas-Bilocura.

27. Id. at 292.

28. Id. at 46.
29. Id. at 268-278.
30. Id. at 279-280.

31. Id. at 279.

32. Id. at 279-280.
33. Id. at 48.
34. Id. at 49.
35. Id.

36. Id. at 51.

37. Id. at 54.
38. Id. at 51.
39. Id.
40. Id. at 52.

41. Id. at 29.

42. Indophil Textile Mills, Inc. v. Engr. Adviento , 740 Phil. 336, 344 (2014), citing
San Miguel Corporation v. Etcuban, 377 Phil. 733, 745 (1999).
43. Halagueña, et al. v. PAL, Inc., 617 Phil. 502, 514 (2009).
44. LABOR CODE, Article 224, [217] (3).
45. LABOR CODE, Article 224, [217] (6).
46. LABOR CODE, Article 224, [217] (4).

47. Rollo , p. 51.

48. 740 Phil. 336 (2014).

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 49. Id. at 346. Citations omitted.
50. Rollo , p. 283.
51. Id. at 44.
52. 617 Phil. 502 (2009).
53. Id. at 514-515. Citations omitted.

54. Rollo , p. 290.

55. Id. at 429-450.
56. Id. at 443.
57. Id. at 52.

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