FACTS:

Petitioner San Miguel Corporation (SMC) sponsored an Innovation Program which grants cash
rewards to all SMC employees who submit to the corporation ideas and suggestions found to
beneficial to the corporation.

Private Respondent Rustico Vega, who is a mechanic in the Bottling Department of the SMC
submitted an innovation proposal which supposed to eliminate certain defects in the quality and
taste of the product San Miguel Beer Grande.

Petitioner Corporation did not accept the said proposal

and refused Mr. Vegas subsequentdemands for cash award under the innovation program.
Hence, Vega filed a complaint with the then Ministry of Labor and Employment in Cebu. He
argued that his proposal had been accepted by the methods analyst and was implemented by the
SMC and it finally solved the problem of the Corporation in the production of Beer Grande.

Petitioner denied of having approved Vegas proposal. It stated that said proposal was turned
down for lack of originality and the same, even if implemented, could not achieve the
desire result.Further, petitioner Corporation alleged that theLabor Arbiter had no jurisdiction.

The Labor Arbiter dismissed the complaint for lack of jurisdiction because the claim of Vega
is not a necessary incident of his employment and does not fall under Article 217 of the Labor
Code. However, in a gesture of compassion and to show the governments concern for
the working man, the Labor Arbiter ordered petitioner to pay Vega P2,
000 as financial assistance. Both parties assailed said decision of the Labor Arbiter. The NLRC
set aside the decision of the Labor Arbiter and ordered SMC to pay complainant the amount of
P60, 000

Issue:
Whether the Labor Arbiter and the Commission has jurisdiction over the money claim filed by
private respondent

HELD:
NO
The Labor Arbiter and the Commission has no jurisdiction over the money claim of Vega.
The court ruled that the money claim of private respondent Vega arose out of or in connection
with his employment with petitioner. However, it is not enough to bring Vegas money claim
within the original and exclusive jurisdiction of Labor Arbiters. In the CAB, the undertaking of
petitioner SMC to
grantcash awards to employees could ripen into anenforceable contractual obligation on the part
of petitioner SMC under certain circumstances. Hence, the issue whether an enforceable contract
had arisen between SMC and Vega, and whether it has been breached, are
legal questions that labor legislations cannot resolved because its recourse is the law on
contracts. Where the claim 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 NLRC.