Payment of Employment Bond

2020 January 22

On 4 April 2011, CP, Inc. hired the employee as its Network Engineer.

The employment contract stated that the employee shall pay an “employment bond” of Eighty Thousand Pesos (Php80,000.00) if she resigns within twenty-four (24) months from the time of her employment.

On 5 August 2011, the employee informed CP, Inc. of her intention to resign effective 9 September 2011. However, the employee was found to have committed an infraction and was placed on preventive suspension from 25 August up to 9 September 2011.

The employee thus filed a complaint for illegal suspension, while CP, Inc. pursued its claim of payment of “employment bond” in the same proceedings.

Should the claim for payment of “employment bond” be filed before the labor tribunals?

Yes.

Article 224 of the Labor Code of the Philippines clothes the labor tribunals with original and exclusive jurisdiction over claims for damages arising from employer-employee relationship, viz.:

Art. 224. 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: x x x

4 Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;

Jurisprudence1Bañez v. Valdevilla, G.R. No. 128024, May 9, 2000, 387 PHIL 601-612 also teaches that the jurisdiction of labor tribunals is comprehensive enough to include claims for all forms of damages “arising from the employer-employee relations.” Thus, labor tribunals have jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the Civil Code. Furthermore, while Article 224 of the Labor Code had been invariably applied to claims for damages filed by an employee against the employer, the said provision was also applied with equal force to an employer’s claim for damages against its dismissed employee, provided that the claim had arisen from or was necessarily connected with the fact of termination and entered as a counterclaim in the illegal dismissal case.2Supra Multi-Services, Inc. v. Labitigan, G.R. No. 192297, August 3, 2016, 792 PHIL 336-370. Thus, the “reasonable causal connection with the employer-employee relationship” is a requirement not only in employees’ money claims against the employer but is, likewise, a condition when the claimant is the employer.3Portillo v. Rudolf Lietz, Inc., G.R. No. 196539, October 10, 2012, 697 PHIL 232-250

In the present case, the Supreme Court found that the controversy was rooted in the employee’s resignation from the company within twenty-four (24) months from the time she got employed, in violation of the “Minimum Employment Length” clause of her employment contract. The Court added that CP, Inc.’s claim for payment was inseparably intertwined with its employment relation with the employee. This was because it was the employee’s act of prematurely severing her employment with the company which gave rise to the latter’s cause of action for payment of “employment bond.” According to the Court, the claim was an offshoot of the employee’s resignation and its complications which eventually led to the filing of the case before the Office of the Labor Arbiter. For the Court, the employer’s claim fell within the original and exclusive jurisdiction of the labor tribunals.

Should the employee pay the “employment bond”?

The Court ruled that the employee was liable because of her undertaking in the employment contract and since the employee herself neither disputed said liability nor assailed the existence and validity of such provision in said contract.

Further reading:

  • Comscentre Phils., Inc. v. Rocio, G.R. No. 222212, January 22, 2020.

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