DAY ONE

A. INTRODUCTION

1. Constitutional and statutory basis

1.1 Consti., art. 2, secs. 9-14, 18 and 20.

1.2 Consti., art. 3, secs. 10 and 18
1.2 Consti., art. 13, sec. 3
1.3 Labor Code, art. 112
1.4 Civil Code, Article 1700

2. General principles of labor law

2.1 Existence of employer-employee relationship is necessary for the

application of labor laws (See Section B for cases)

a) Principle of incorporation

b) Employment not merely a contractual relationship:

1 Capitol Medical Center vs. Meris, 470 SCRA 125 [2005]
2

Convoy Marketing Corporation, et al. vs. Oliver B. Albia, G.R. No.

1949, 07 October 2015.

Issue:
Whether Employer-Employee relationship exist between the petitioner and
Albia

Ruling:
It bears emphasis that the existence of an employer--employee relationship
cannot be negated by expressly repudiating it in a contract and providing
therein that the employee is an independent contractor when the facts
clearly show otherwise. This is because the employment status of a person
is defined and prescribed by law and not by what the parties say it should
be.

The Court cannot likewise sustain petitioners claim that Albia is an

independent contractor. The test of independent contractorship is whether
one claiming to be an independent contractor has contracted to do the work
according to his own methods and without being subject to the control of the
employer, except only as to the results of the work. The criteria in
determining the existence of an independent and permissible contractor
relationship are as follows:

Whether or not the contractor is carrying on an independent business; the

nature and extent of the work; the skill required; the term and duration of the
relationship; the right to assign the performance of a specified piece of work;
the control and supervision of the work to another; the employers power
with respect to the hiring, firing and payment of the contractors workers; the
control of the premises; the duty to supply the premises, tools, appliances,
materials, and labor; and the mode, manner and terms of payment.

c) Who has initial burden of proving existence of an employer-employee

relationship?
3 Danilo P. Javier (Bitoy Javier) vs. FlyAce Corporation, G.R. No. 192558,
15 February 2012
4 Bernard A. Tenazas, Jaime Francisco, and Isidro Endraca v. R. Villegas 5
Taxi Transport, G.R. No. 192998, 02 April 2014

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 BERNARD TENAZA ET AL VS. VILLEGAS TAXI
TRANSPORT
ISSUE:
WON FRANCISCO, A SPARE DRIVER OF VILLEGAS TAXI
TRANSPORT, AND WHO WAS ALLEGEDLY ILLEGALLY
DISMISSED FROM WORK, IS AN EMPLOYEE OF VILLEGAS
TAXI TRANSPORT?
RULING:
NO.
[I]n determining the presence or absence of an employer-employee
relationship, the Court has consistently looked for the following
incidents, to wit: (a) the selection and engagement of the employee;
(b) the payment of wages; (c) the power of dismissal; and (d) the
employers power to control the employee on the means and methods
by which the work is accomplished. The last element, the so-called
control test, is the most important element.
Francisco failed to present any proof substantial enough to establish
his relationship with the respondents. He failed to present
documentary evidence like attendance logbook, payroll, SSS record
or any personnel file that could somehow depict his status as an
employee. Anent his claim that he was not issued with employment
records, he could have, at least, produced his social security records
which state his contributions, name and address of his employer. He
could have also presented testimonial evidence showing the
respondents exercise of control over the means and methods by
which he undertakes his work. This is imperative in light of the
respondents denial of his employment and the claim of another taxi
operator, Emmanuel Villegas (Emmanuel) that he was his employer.

Valencia vs. Classique Vinyl Products Corp.

G.R. No. 206390. 30 January 2017

ISSUE: Whether Classique Vinyl has the initial burden of proving existence of an
employer-employee relationship?

HELD: NO. The burden of proof rests upon the party who asserts the affirmative of
an issue'." In his Sinumpaang Salaysay, Valencia alleged that he applied for work
with Classique Vinyl but was referred to CMS, a local manpower agency, and
therein submit the requirements for employment. Since it is Valencia here who is
claiming to be an employee of Classique Vinyl, it is thus incumbent upon him to
proffer evidence to prove the existence of employer-employee relationship between
them. He "needs to show by substantial evidence that he was indeed an employee
of the company against which he claims illegal dismissal." Corollary, the burden to
prove the element of an employer employee relationship, viz.: (l) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal;
and (4) the power of control, lies upon Valencia. In this case however, Valencia
failed to present competent evidence, documentary or otherwise, to support his
claimed employer employee relationship between him and Classique Vinyl. All he
advanced were mere factual assertions unsupported by proof.

Danilo P. Javier (Bitoy Javier) vs. FlyAce Corporation

GR No. 192558, February 15, 2012

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 Issue: Whether Javier, who is an alleged stevedore of FlyAce
Corporation, was able to present sufficient evidence to prove that he is a
regular employee of the latter.

Ruling: NO. The Court is of the considerable view that on Javier lies the
burden to pass the well-settled tests to determine the existence of an
employer-employee relationship, viz: (1) the selection and engagement
of the employee; (2) the payment of wages; (3) the power of dismissal;
and (4) the power to control the employees conduct. Of these elements,
the most important criterion is whether the employer controls or has
reserved the right to control the employee not only as to the result of the
work but also as to the means and methods by which the result is to be
accomplished.

In this case, Javier was not able to persuade the Court that the above
elements exist in his case. He could not submit competent proof that Fly
Ace engaged his services as a regular employee; that Fly Ace paid his
wages as an employee, or that Fly Ace could dictate what his conduct
should be while at work. In other words, Javiers allegations did not
establish that his relationship with Fly Ace had the attributes of an
employer-employee relationship on the basis of the above-mentioned
four-fold test. Worse, Javier was not able to refute Fly Aces assertion
that it had an agreement with a hauling company to undertake the
delivery of its goods. It was also baffling to realize that Javier did not
dispute Fly Aces denial of his services exclusivity to the company. In
short, all that Javier laid down were bare allegations without
corroborative proof.

Fly Ace does not dispute having contracted Javier and paid him on a per
trip rate as a stevedore, albeit on a pakyaw basis. The Court cannot fail
to note that Fly Ace presented documentary proof that Javier was indeed
paid on a pakyaw basis per the acknowledgment receipts admitted as
competent evidence by the LA. Unfortunately for Javier, his mere denial
of the signatures affixed therein cannot automatically sway us to ignore
the documents because forgery cannot be presumed and must be
proved by clear, positive and convincing evidence and the burden of
proof lies on the party alleging forgery.

2.2 Burden of proof upon employer to show validity of the exercise of

its prerogatives

2.3 Only substantial evidence is required in administrative

proceedings
7 Alilem Credit Cooperative vs. Bandiola, G.R. No. 173489, 25 February 2013

2.4 In case of doubt or ambiguity, liberal interpretation of law in favor of

workers

8 Price vs. Innodata Phils., 567 SCRA 122 [2008]

Issue: WON petitioners were hired by Innodata under valid fixed-term

employment contracts considering the ambiguity in the contract.

Ruling: NO. The principles on interpretation of contract were applied in

this case. First, a contract of employment, being a contract of adhesion,
any ambiguity therein should be construed strictly against the party who
prepared it. Second, all doubts, uncertainties, ambiguities and
insufficiencies should be resolved in favor of labor.
Here, the contracts of employment submitted by respondents are highly
suspect for not only being ambiguous, but also for appearing to be

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tampered with. There was modification and denial by respondents as to
the real beginning date of petitioners employment contracts render the
said contracts ambiguous and the copies of the employment contracts
submitted by petitioners bore similar alterations.
Hence, in resolving the ambiguity in favour of labor, the court ruled that
the petitioners are regular employees.

9 BPI vs. BPI Employees Union Metro Manila, G.R. No. 175678, 22 August
2012

BPI vs. BPI Employees Union Metro Manila, G.R. No. 175678, 22 August
2012

ISSUE: Whether the 2005 Decision of the SC reinstated the 1997 Decision of
the Voluntary arbitrator which ordered the payment of full back wages including
all benefits under the CBA. NO.

RULING: After Uy and the Union filed the case for illegal dismissal, the
Voluntary Arbitrator rendered his Decision on December 31, 1997. On appeal,
the CA, in its October 28, 1998 Decision, affirmed with modification the Decision
of the Voluntary Arbitrator. Instead of full back wages, the CA limited the award
to three years. Also, in lieu of reinstatement, the CA ordered BPI to pay
separation pay.

Uys and the Unions contention that the March 31, 2005 Decision of the
Supreme Court in effect reinstated the December 31, 1997 Decision of the
Voluntary Arbitrator awarding full back wages including the CBA benefits, is
without basis. What is clear is that the March 31, 2005 Decision modified the
October 28, 1998 Decision of the CA by awarding full back wages instead of
limiting the award to a period of three years. This interpretation is further
bolstered by the SCs discussion in the main body of March 31, 2005 Decision
as to the meaning of full back wages in view of the passage of Republic Act
No. 6715 which amended Article 279 of the Labor Code.

Such award of back wages is without qualifications and deductions, that is,
unqualified by any wage increases or other benefits that may have been
received by co-workers who were not dismissed It is likewise settled that the
base figure to be used in the computation of back wages is pegged at the wage
rate at the time of the employees dismissal unqualified by deductions, increases
and/or modifications.

10 Philippine Journalist Inc. vs. Journal Employees Union, G.R. No. 192601, 26
June 2013
11 National Union Of Workers In Hotel Restaurant And Allied Industries
(NUWHRAIN) - Philippine Plaza Chapter vs. Philippines Plaza Inc., G.R. No.
177524, 23 July 2014.
12 En contra: Mitsubishi Motors Phils. Salaried Employees Union (MMPSEU)
vs. Mitsubishi Motors Phils Corp., G.R. No. 175773, 17 June 2013

Mitsubishi Motors Philippines Salaried Employees Union (MMPSEU) vs.

Mitsubishi Motors Philippines Corporation (MMPC)
G.R. No. 175773. June 17, 2013.
DEL CASTILLO, J.:

Facts: MMPSEU alleged that there is nothing in the CBA which prohibits an
employee from obtaining other insurance or declares that medical expenses
can be reimbursed only upon presentation of original official receipts. It
stressed that the hospitalization benefits should be computed based on the

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 formula indicated in the CBA without deducting the benefits derived from other
insurance providers. Besides, if reduction is permitted, MMPC would be
unjustly benefitted from the monthly premium contributed by the employees
through salary deduction. MMPSEU added that its members had legitimate
claims under the CBA and that any doubt as to any of its provisions should be
resolved in favor of its members. Moreover, any ambiguity should be resolved
in favor of labor.

On the other hand, MMPC argued that the reimbursement of the entire
amounts being claimed by the covered employees, including those already
paid by other insurance companies, would constitute double indemnity or
double insurance, which is circumscribed under the Insurance Code. Moreover,
a contract of insurance is a contract of indemnity and the employees cannot be
allowed to profit from their dependents loss.

Issue: Whether or not recovery of medical expenses from a Health

Maintenance Organization bars recovery of the same reimbursable amount of
medical expenses under a contract of health or medical insurance.

Held: Yes. The conditions set forth in the CBA provision indicate an intention to
limit MMPCs liability only to actual expenses incurred by the employees
dependents, that is, excluding the amounts paid by dependents other health
insurance providers.

It is well to note at this point that the CBA constitutes a contract between the
parties and as such, it should be strictly construed for the purpose of limiting
the amount of the employers liability. The terms of the subject provision are
clear and provide no room for any other interpretation. As there is no ambiguity,
the terms must be taken in their plain, ordinary and popular sense.
Consequently, MMPSEU cannot rely on the rule that a contract of insurance is
to be liberally construed in favor of the insured. Neither can it rely on the theory
that any doubt must be resolved in favor of labor.

The condition that payment should be direct to the hospital and doctor implies
that MMPC is only liable to pay medical expenses actually shouldered by the
employees dependents. It follows that MMPCs liability is limited, that is, it
does not include the amounts paid by other health insurance providers. This
condition is obviously intended to thwart not only fraudulent claims but also
double claims for the same loss of the dependents of covered employees.

2.5 But management rights likewise protected

13 Best Wear Garments vs. De Lemos, G.R. No 191281, 05 December

2012.

Issue: Whether De Lemos and Ocubillo were constructively dismissed when

they were transferred to other areas of operation causing in less earnings for
them.

Ruling: No. De Lemos and Ocubillo were not constructively dismissed.

The right of employees to security of tenure does not give them vested rights to
their positions to the extent of depriving management of its prerogative to
change their assignments or to transfer them.

The constitutional policy of providing full protection to labor is not intended to

oppress or destroy management. While the Constitution is committed to the
policy of social justice and the protection of the working class, it should not be
supposed that every labor dispute will be automatically decided in favor of
labor. Management also has its rights which are entitled to respect and
enforcement in the interest of simple fair play. Thus, where management
prerogative to transfer employees is validly exercised, as in this case, courts

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 will decline to interfere.

2.6 Paradigm shift towards mutual cooperation - Consti, Art XIII, Sec. 3
14 Toyota Motor Phils. Workers vs. NLRC, 537 SCRA 171

ISSUE: Whether the employer and employee should stop treating each other as adversaries and
instead recognize that what they have is a symbiotic relationship.
RULING: Yes. Employer and employee should recognize that what they have is a symbiotic
relationship. They must rely on each other to ensure success of the business. When they
consider only their own self-interests, and when they act only with their own benefit in mind, both
parties suffer from short-sightedness, failing to realize that they both have a stake in the
business. The employer wants the business to succeed, considering the investment that has
been made. The employee in turn, also wants the business to succeed, as continued employment
means a living, and the chance to better ones lot in life. It is clear then that they both have the
same goal, even if the benefit that results may be greater for one party than the other. If this
becomes a source of conflict, there are various, more amicable means of settling disputes and of
balancing interests that do not add fuel to the fire, and instead open avenues for understanding
and cooperation between the employer and the employee. Even though strikes and lockouts have
been recognized as effective bargaining tools, it is an antiquated notion that they are truly
beneficial, as they only provide short-term solutions by forcing concessions from one party; but
staging such strikes would damage the working relationship between employers and employees,
thus endangering the business that they both want to succeed. The more progressive and truly
effective means of dispute resolution lies in mediation, conciliation, and arbitration, which do not
increase tension but instead provide relief from them. In the end, an atmosphere of trust and
understanding has much more to offer a business relationship than the traditional enmity that has
long divided the employer and the employee.

2.7 Principle of Social and Distributive Justice: Balancing of interests in case

workers and managements rights collide.
15 Reynaldo Moya vs. First Solid Rubber Industries, G.R. No. 184011, 18
September 2013

B. EMPLOYER-EMPLOYEE RELATIONSHIP

1. Employer defined: Art. 219 [prev 212] (e), LC;

DOLE Dept. Order 40 [2003], R1 S1 (s)

2. Employee defined: Art. 219 [prev 212] (f), LC

DOLE Dept. Order 40 [2003], R1 S1 (r)

3. Employer relationship as matrix

3.1 Concept of employer-employee relationship

3.2 Tests to determine the existence of employer-employee relationship

(Memory aid: South West Disaster Control)
a. Selection and hiring
b. Payment of Wages
c. Power of Dismissal
d. Control test

Cases:
16 Republic of the Philippines represented by the Social Security Commission
and Social Security Services vs. Asiapro Cooperative, G.R. No. 172101, 23
November 2007
17 Legend Hotel [Manila], owned by Titanium Corporation, et al. vs. Hernani S.
Realuyo, also known as Joey Roa. G.R. No. 153511, 18 July 2012.

Issue: Whether or not respondent was an employee of petitioner.

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 Held:
Yes. A review of the circumstances reveal that respondent was the petitioners
employee. Applying the control test, which is considered the most significant
determinant of the existence of an employer-employee relationship. It is the
power of the employer to control the work of the employee. It is premised in
whether the person for whom the services are performed reserves the right to
control both the end achieved and the manner and means used to achieve that
end.
A review of the records shows, that respondent performed his work as a pianist
under petitioners supervision and control. Specifically, the control of both the end
achieved and the manner and means used to achieve that end which was
demonstrated by the following, circumstances, First, He could not choose the
time of his performance, which petitioners had fixed from 7:00 pm to 10:00 pm,
three to six times a week; Second, He could not choose the place of his
performance; Third, the restaurants manager required him at certain times to
perform only Tagalog songs or music, or to wear barong Tagalog to conform to
the Filipiniana motif; and Fourth, He was subjected to the rules on employees
representation check and chits, a privilege granted to other employees.
Relevantly, it is worth remembering that the employer need not actually supervise
the performance of duties by the employee, for it sufficed that the employer has
the right to wield that power.
Under the present circumstances, he was undeniably employed as a pianist in
petitioners Madison Coffee Shop/Tanglaw Restaurant from September 1992 until
his services were terminated on July 9, 1999.

18 Navarette vs. Manila Intl Freight Forwarders, G.R. No. 200580, 11 Feb 2015.

19 Diamond Farms, Inc. vs. Southern Philippines Federation of Labor (SPFL),

etc., et al., G.R. Nos. 173254-55 and 173263, 13 January 2016.

Issue: Who among DFI, DARBMUPCO and the respondent-contractors is the

employer of the respondent-workers?

Ruling: DFI IS THE EMPLOYER. DARBMUPCO is a multi-purpose cooperative

composed of farmers working in the plantation owned by DFI. It entered into an
agreement with DFI to grow and cultivate bananas to be sold only to DFI. To
assist DARBMUPCO, DFI engaged the services of respondent-contractors, who
in turn recruited the respondent-workers. Later, the respondent-workers filed a
case for underpayment of wages and nonpayment of benefits against DFI,
DARBMUPCO and the respondent-contractors.

A contractor is presumed to be a labor-only contractor, unless such contractor

overcomes the burden of proving that it has the substantial capital, investment,
tools and the like. There is no evidence showing that respondent-contractors are
independent contractors. All farm tools, implements and equipment necessary to
performance of such farm activities were supplied by DFI. The respondent-
contractors were being directly supervised, controlled and managed by DFI farm
managers and supervisors, specifically on work assignments and performance
targets. DFI managers and supervisors, at their sole discretion and prerogative,
could directly hire and terminate any or all of the respondent-workers. Moreover,
DFI pays the wages of respondent-workers. Thus, respondent-contractors are
labor-only contractors and DFI is their principal. In labor-only contracting, it is the
law which creates an employer-employee relationship between the principal and
the workers of the labor-only contractor. The stipulation in their agreement that
respondent-workers are not employees of DFI is not controlling. The law prevails
over the stipulations of the parties. Under Article 106 of the Labor Code, DFI shall
be solidarily liable with the respondent-contractors for the rightful claims of the
respondent-workers, to the same manner and extent as if the latter are directly
employed by DFI.

3.3 Who has jurisdiction to determine ER-EE relationship: Secretary of Labor

or the National Labor Relations Commission?

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 20 Peoples Broadcasting (Bombo Radyo Phils) vs. Secretary of Labor, G.R. No.
179652, 08 May 2009

Issue:
Who has jurisdiction to determine ER-EE relationship: Secretary of Labor or the National Labor
Relations Commission?
Held:
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to
make a determination as to the existence of an employer-employee relationship in the exercise of
its visitorial and enforcement power, subject to judicial review, not by the NLRC. If a complaint is
brought before the DOLE to give effect to the labor standards provisions of the Labor Code or
other labor legislation, and there is a finding by the DOLE that there is an existing employer-
employee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the DOLE
finds that there is no employer-employee relationship, the jurisdiction is properly with the NLRC. If
a com-plaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the
jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides
that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages,
rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a
claim for reinstatement.

3.4 Reasonable causal connection:

21 Indophil Textile Mills Vs. Adviento, G.R. No. 171212, 04 August 2014

Issue:
W/N RTC has jurisdiction over the illegal termination and damages arising from
gross negligence and failure of company to provide a safe, workable and healthy
environment case between petitioner whos a textile manufacturer and
respondent civil engineer engaged in maintaining the facilities of petitioner.
Held:
Yes, No reasonable causal connection between claim and employer-employee
relationship.
Although adviento contracted the occupational disease duting his employment
with the company, there is no reasonable causal connection between the claim
asserted and the EER. As such, the case does not fall within the jurisdiction of
the labor courts.

Is a car benefit a labor or a civil dispute?

22 Smart Communications vs. Astorga, 542 SCRA 434, 27 Jan 2008

Smart Communications vs. Astorga, 542 SCRA 434, 27 Jan 2008

ISSUE: WON a car benefit is a labor or civil dispute

RULING: CIVIL DISPUTE

The RTC rightfully assumed jurisdiction over the suit and acted well within its discretion in
denying Astorgas motion to dismiss. SMARTs demand for payment of the market value of the
car or, in the alternative, the surrender of the car, is not a labor, but a civil, dispute. It involves the
relationship of debtor and creditor rather than employee-employer relations. As such, the dispute
falls within the jurisdiction of the regular courts.

In Basaya, Jr. v. Militante, this Court, in upholding the jurisdiction of the RTC over the replevin
suit, explained:

Replevin is a possessory action, the gist of which is the right of possession in the plaintiff.
The primary relief sought therein is the return of the property in specie wrongfully
detained by another person. It is an ordinary statutory proceeding to adjudicate rights to
the title or possession of personal property. The question of whether or not a party has
the right of possession over the property involved and if so, whether or not the adverse

8
 party has wrongfully taken and detained said property as to require its return to plaintiff, is
outside the pale of competence of a labor tribunal and beyond the field of specialization
of Labor Arbiters.

23 Grandteq Industrial Steel Products vs. Edna Margallo, G.R. No. 181393, 28 July 2009.

ISSUE: WON Margallo is entitled to recover the car loan payments that she made
RULING: YES.
Grandteq insisted that Margallo had no right to the refund of her car loan payments under the car
loan agreement, which expressly provide that in the event that Margallo resigned or was
terminated for cause, her car loan payments would be forfeited in favor of Grandteq, and
Grandteq would regain possession of the car.

The principle against unjust enrichment obliges Grandteq to refund to Margallo the car loan
payments she had made, since she has not actually acquired the car. To relieve Grandteq of the
obligation to reimburse Margallo would, indeed, be to sanction unjust enrichment in favor of the
first two and cause unjust poverty to the latter.

Although not strictly a labor contract, the car loan agreement herein involves a benefit extended
by the employers, Grandteq and Gonzales, to their employee, Margallo. It should benefit, and not
unduly burden, Margallo. The Court cannot, in any way, uphold a car loan agreement that
threatens the employee with the forfeiture of all the car loan payments he/she had previously
made, plus loss of the possession of the car, should the employee wish to resign; otherwise, said
agreement can then be used by the employer as an instrument to either hold said employee
hostage to the job or punish him/her for resigning.

Counterclaim involving transfer of ownership of company car falls within

ambit of the Labor Arbiters jurisdiction.
24 Domondon vs. NLRC, 471 SCRA 559 [2005]

Issue: W/N LA has jurisdiction to hear and decide the question on the transfer of
ownership of the car assigned to petitioner in lieu of the financial assistance
granted by the respondent to petitioner in contrast with a company policy which
prohibits transfer of ownership of property without valuable consideration.
Held:
Yes, the transfer of ownership of the company car to petitioner is connected with
his resignation and arose out of the parties employer-employee relations.

3.5 Corporate officer or employee?

25 Prudential Bank vs. Clarita Reyes, 352 SCRA 316

Issue:
Is an appointed Assistant Vice-President of a bank which was previously an
Accounting Clerk and a Supervisor considered a corporate officer or a regular
employee?

Held:
A regular employee.
The primary standard of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to
the usual trade or business of the employer. Additionally, an employee is regular
because of the nature of work and the length of service, not
because of the mode or even the reason for hiring them. As Assistant Vice-
President of the Foreign Department of the Bank she performs tasks integral to
the operations of the bank and her length of service with the bank totaling 28
years speaks volumes of her status as a regular employee of the bank. In fine, as
a regular employee, she is entitled to security of tenure; that is, her services may
be terminated only for a just or authorized cause.

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 Renato Real vs. Sangu Philippines, Inc. G.R. No.168757, 19 January 2011

26 Raul C. Cosare vs. Broadcom Asia, Inc. and Dante Arevalo, G.R. No. 201298,
05 February 2014

Issue: Whether the illegal dismissal case instituted by Cosare was an intra-
corporate dispute that was within the original jurisdiction of the RTC and not of the
Labor Arbiter.

Ruling: NO, it is the Labor Arbiter which has the original jurisdiction over the
subject controversy because Cosare, although an officer of Broadcom for
being its AVP for Sales, was not a corporate officer as the term is defined
by law. In determining the existence of an intra-corporate dispute, the status or
relationship of the parties and the nature of the question that is the subject of the
controversy must be taken into account. Since the pending dispute relates to
Cosares rights and obligations as a regular officer of Broadcom, instead of as a
stockholder, the controversy cannot be deemed intra-corporate.

There are two circumstances which must concur in order for an individual to be
considered a corporate officer, namely: (1) the creation of the position is under the
corporations charter or by-laws; and (2) the election of the officer is by the
directors or stockholders. It is only when the officer claiming to have been illegally
dismissed is classified as such corporate officer that the issue is deemed an intra-
corporate dispute which falls within the jurisdiction of the trial courts. The only
officers who are specifically listed, and thus with offices that are created under
Broadcoms by-laws are the following: the President, Vice President, Treasurer
and Secretary. Although a blanket authority provides for the Boards appointment
of such other officers as it may deem necessary and proper, the respondents
failed to sufficiently establish that the position of AVP for Sales was created by
virtue of an act of the board, and that Cosare was specifically elected or appointed
to such position by the directors.

Extent of liability of corporate officers: General rule and exception

27 Essencia Q. Manarpiis vs. Texan Philippines, Inc., et al., G.R. No. 197011, 28
January 2015
28 The Coffee Bean and Tea Leaf Philippines, Inc. vs. Rolly P. Arenas, G.R. No.
208908, 11 March 2015.
Issue: Whether or not the petitioner Chu, should be held jointly and severally
liable with CBTL for Arenas adjudged monetary awards.

Held:
No. A corporation is a juridical entity with a legal personality separate and distinct
from those acting for and in its behalf and, in general, from the people comprising
it. Thus, as a general rule, an officer may not be held liable for the corporations
labor obligations unless he acted with evident malice and/or bad faith in
dismissing an employee. In the present case, there was no showing of any evident
malice or bad faith on Chus part as CBTLs president. His participation in Arenas
termination was not even sufficiently alleged and argued. Hence, he cannot be
held solidarily liable for CBTLs liabilities to Arenas.

3.7 Effect when NO employer-employee relationship exists, or when the main

issue does not involve Er-Ee relationship
- jurisdiction devolves with the regular courts

29 Manliguez vs. Court of Appeals, 232 SCRA 427

30 Georg Grotjahn GMBH vs. Isnani, 235 SCRA 216

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