Dear Atty. Kathy,

We have an employee who has resigned. Said employee did not comply with her obligation to stay with our company for a minimum period of 2 years, after the costly training for a highly technical course that she participated in and that the company paid for. According to the agreement that the employee signed, if she does not complete the 2-year minimum period of employment after the training, she is obligated to reimburse the company for the prorated training expenses. However, even with an authority to deduct, the employee’s final pay is not sufficient to cover the required reimbursement. Unfortunately, the employee is not cooperating with us. Could the company then file a claim for the reimbursement with the NLRC since it involves an employee-employer relationship?

Blake

Dear Blake,

According to the Supreme Court, the settlement of the matter on the reimbursement of the training cost draws attention to Article 1191 of the Civil Code, which provides:

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.

The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law. (1124)

In this regard, the labor tribunals do not have jurisdiction to settle issues which require the application of civil law on obligations and contracts.

As further held by the Supreme Court, such alleged contractual violation did not arise during the existence of the employer-employee relationship, but is a post-employment matter, therefore, a post-employment violation.

Based solely on your narration, there is no relief sought under the Labor Code, and that the Company is only seeking reimbursement for the training cost as related to the employer-employee relationship. Since jurisdiction is fixed by law and not by the parties, the NLRC cannot exercise jurisdiction based only on the circumstance of an employer-employee relationship.

In sum, Civil Law governs such cause of action, over which the regular courts have jurisdiction, and not the NLRC. A claim for the reimbursement of the training cost should therefore be filed with the regular courts.

(Jose Edwin G. Esico vs Alphaland Corporation, et al., G.R. No. 216716, 17 November 2021)

Atty. Kathy Larios