RAMON C. LOZON vs.
NATIONAL LABOR RELATIONS Petitioner then filed a motion for reconsideration, which was denied by the
COMMISSION (Second Division) and PHILIPPINE AIRLINES, INC. G.R.
No. 107660, January 2, 1995
FACTS
Petitioner Ramon C. Lozon, a certified public accountant, was a Senior
Vice-President-
Finance of Private respondent Philippine Airlines, Inc. (“PAL”), when his ser
vices were terminated in the aftermath of the much-publicized “two-billion-
peso PALscam.”
Aggrieved, petitioner, filed with the National Labor Relations Commission (
“NLRC”) in Manila for illegal dismissal and for reinstatement, with backwag
es and “fringe benefits such as Vacation leave, Sick leave, 13th month pay, C
hristmas Bonus, Medical Expenses, car expenses, trip pass entitlement, etc., p
lus moral damages of P40 Million, exemplary damages of P10 Million and re
asonable attorney’s fees.”
ISSUE:Whether or not the NLRC has jurisdiction over the illegal dismissal c
ase in a corporation.
HELD:No. Labor Arbiters have no jurisdiction over termination of corporate
officers and stockholders which, under the law, is considered intra-
corporate dispute. It must be emphasized that a corporate officer’s dismissal
is always a corporate act and/or intra-
corporate controversy and that nature is not altered by the reason or wisdom
which the Board of Directors may have in taking such action. The Regional
Trial Courts now have jurisdiction under RA 8799(Securities Regulation Act
of 2000). Jurisdiction of RTC includes adjudication of monetary claims of the
corporate officer who was dismissed, such as unpaid salaries, leaves, 13th m
onth pay, damages and attorney’s fee.
NACPIL vs. IBC DIGEST
DECEMBER 21, 2016 ~ VBDIAZ
G.R. No. 144767 March 21, 2002
DILY DANY NACPIL, petitioner,
vs.INTERNATIONAL BROADCASTING CORPORATION, respondent.
Facts: Petitioner states that he was Assistant General Manager for
Finance/Administration and Comptroller of private respondent
Intercontinental Broadcasting Corporation (IBC) from 1996 until April 1997.
According to petitioner, when Emiliano Templo was appointed to replace
IBC President Tomas Gomez III sometime in March 1997, the former
(Templo) told the Board of Directors that as soon as he assumes the IBC
presidency, he would terminate the services of petitioner. Apparently,
Templo blamed petitioner, along with a certain Mr. Basilio and Mr. Gomez,
for the prior mismanagement of IBC. Upon his assumption of the IBC
presidency, Templo allegedly harassed, insulted, humiliated and pressured
petitioner into resigning until the latter was forced to retire.
However, Templo refused to pay him his retirement benefits. Furthermore,
Templo allegedly refused to recognize petitioner’s employment, claiming
that petitioner was not the Assistant General Manager/Comptroller of IBC
but merely usurped the powers of the Comptroller. Hence, petitioner filed
with the Labor Arbiter a complaint for illegal dismissal and non-payment of
benefits.
Instead of filing its position paper, IBC filed a motion to dismiss alleging that
the Labor Arbiter had no jurisdiction over the case. IBC contended that
petitioner was a corporate officer who was duly elected by the Board of
Directors of IBC; hence, the case qualifies as an intra-corporate dispute
falling within the jurisdiction of the Securities and Exchange Commission
(SEC). However, the motion was denied by the Labor Arbiter in an Order.
The Labor Arbiter rendered a Decision stating that petitioner had been
illegally dismissed.
IBC appealed to the NLRC, but the same was dismissed in a Resolution.
IBC then filed a motion for reconsideration that was likewise denied. IBC
then filed with the Court of Appeals a petition for certiorari under Rule 65,
which petition was granted by the appellate court in its Decision which
reversed and set aside the decision of the Labor Arbiter and the NLRC and
dismissed the complaint without prejudice.
appellate court. Hence, this petition.
Issue: Whether the Labor Arbiter had jurisdiction over the case for illegal
dismissal and non-payment of benefits filed by petitioner.
Ruling: The Court finds that the Labor Arbiter had no jurisdiction over the
same.
Under Presidential Decree No. 902-A (the Revised Securities Act), the law in
force when the complaint for illegal dismissal was instituted by petitioner in
1997, the following cases fall under the exclusive of the SEC:
a) Devices or schemes employed by or any acts of the board of directors,
business associates, its officers or partners, amounting to fraud and
misrepresentation which may be detrimental to the interest of the public
and/or of the stockholders, partners, members of associations or
organizations registered with the Commission;
b) Controversies arising out of intra-corporate or partnership relations,
between and among stockholders, members or associates; between any or all
of them and the corporation, partnership or association of which they are
stockholders, members or associates, respectively; and between such
corporation, partnership or association and the State insofar as it concerns
their individual franchise or right to exist as such entity;
c) Controversies in the election or appointment of directors, trustees, officers,
or managers of such corporations, partnerships or associations;
d) Petitions of corporations, partnerships, or associations to be declared in
the state of suspension of payments in cases where the corporation,
partnership or association possesses property to cover all of its debts but
foresees the impossibility of meeting them when they respectively fall due or
in cases where the corporation, partnership or association has no sufficient
assets to cover its liabilities, but is under the Management Committee
created pursuant to this decree. (Emphasis supplied.)
The Court has consistently held that there are two elements to be considered
in determining whether the SEC has jurisdiction over the controversy, to wit:
(1) the status or relationship of the parties; and (2) the nature of the question
that is the subject of their controversy.
Petitioner argues that he is not a corporate officer of the IBC but an
employee thereof since he had not been elected nor appointed as
Comptroller and Assistant Manager by the IBC’s Board of Directors. He
points out that he had actually been appointed as such on January 11, 1995
by the IBC’s General Manager, Ceferino Basilio. In support of his argument,
petitioner underscores the fact that the IBC’s By-Laws does not even include
the position of comptroller in its roster of corporate officers. He therefore
contends that his dismissal is a controversy falling within the jurisdiction of
the labor courts.
Petitioner’s argument is untenable. Even assuming that he was in fact
appointed by the General Manager, such appointment was subsequently
approved by the Board of Directors of the IBC. That the position of
Comptroller is not expressly mentioned among the officers of the IBC in the
By-Laws is of no moment, because the IBC’s Board of Directors is
empowered under Section 25 of the Corporation Code and under the
corporation’s By-Laws to appoint such other officers as it may deem
necessary. The By-Laws of the IBC categorically provides:
XII. OFFICERS
The officers of the corporation shall consist of a President, a Vice-President, a
Secretary-Treasurer, a General Manager, and such other officers as the Board
of Directors may from time to time does fit to provide for. Said officers shall
be elected by majority vote of the Board of Directors and shall have such
powers and duties as shall hereinafter provide (Emphasis supplied).
The Court has held that in most cases the “by-laws may and usually do
provide for such other officers,” and that where a corporate office is not
specifically indicated in the roster of corporate offices in the by-laws of a
corporation, the board of directors may also be empowered under the by-
laws to create additional officers as may be necessary.
An “office” has been defined as a creation of the charter of a corporation,
while an “officer” as a person elected by the directors or stockholders. On
the other hand, an “employee” occupies no office and is generally employed
not by action of the directors and stockholders but by the managing officer
of the corporation who also determines the compensation to be paid to such
employee.
As petitioner’s appointment as comptroller required the approval and
formal action of the IBC’s Board of Directors to become valid, it is clear
therefore holds that petitioner is a corporate officer whose dismissal may be
the subject of a controversy cognizable by the SEC under Section 5(c) of P.D.
902-A which includes controversies involving both election
and appointment of corporate directors, trustees, officers, and managers.
Had petitioner been an ordinary employee, such board action would not
have been required.
Thus, the Court of Appeals correctly held that:
Since complainant’s appointment was approved unanimously by the Board
of Directors of the corporation, he is therefore considered a corporate officer
and his claim of illegal dismissal is a controversy that falls under the
jurisdiction of the SEC as contemplated by Section 5 of P.D. 902-A. The rule
is that dismissal or non-appointment of a corporate officer is clearly an intra-
corporate matter and jurisdiction over the case properly belongs to the SEC,
not to the NLRC.
Considering the foregoing, the Court holds that no error was committed by
the Court of Appeals in dismissing the case filed before the Labor Arbiter,
without prejudice to the filing of an appropriate action in the proper court.
It must be noted that under Section 5.2 of the Securities Regulation Code
(Republic Act No. 8799) which was signed into law by then President Joseph
Ejercito Estrada on July 19, 2000, the SEC’s jurisdiction over all cases
enumerated in Section 5 of P.D. 902-A has been transferred to the Regional
Trial Courts.
WHEREFORE, the petition is hereby DISMISSED and the Decision of the
Court of Appeals is AFFIRMED.
RURAL BANK OF CORON PALAWAN, INC. et al. v. ANNALISA
CORTES
Annalisa Cortes (Cortes) was the Corporate Secretary of the Rural
Bank of Coron and at the same time, Financial Assistant and the Personnel
Officer of the two other corporations. Sandra Garcia Escat, daughter of the
founder of the corporations, found out that Annalisa was involved in several
anomalies and decided to terminate her. A complaint for illegal dismissal was
thereafter filed.
The Labor Arbiter ordered Rural Bank et al. to be jointly and
severally liable to pay Annalisa a large amount of monetary award. The Rural
Bank of Coron Palawan, Inc. et al. alleged that the corporations were under
financial distress and the Rural Bank was under receivership and thus, filed
their Motion for Reduction of Bond, they prayed that the amount of bond be
substantially reduced, preferably one half thereof or even lower.
The National Labor Relations Commission (NLRC), while noting that
the petitioners timely filed the appeal, held that the same was not
accompanied by an appeal bond, a mandatory requirement under Article 223
of the Labor Code and Section 6, Rule VI of the NLRC New Rules of
Procedure. It ordered the dismissal of the complaint. The Court of
Appeals (CA) dismissed the petition. A motion for reconsideration was filed
but the same was dismissed.
ISSUE:Whether or not the decision of the Labor Arbiter is already final and
executory
HELD:In this case, the motion for reduction of appeal bond was filed only on
the tenth or final day of the reglementary period. Under such circumstance,
the motion for reduction can no longer be deemed to have stayed the appeal,
and the Rural Bank of Coron Palawan, Inc. et al faces the risk, as had
happened in this case, of summary dismissal of the appeal for non-perfection.
Clearly then, the NLRC has no authority to entertain the appeal, much less to
reverse the decision of the Labor Arbiter. Any amendment or alteration made
which substantially affects the final and executory judgment is null and void
for lack of jurisdiction, including the entire proceeding held for that purpose.
As the court decided, the decision of the Labor Arbiter had become final and
executory.
MATLING INDUSTRIAL VS COROS (G.R. NO. 157802 OCTOBER 13, 2010)
Facts: After his dismissal by Matling as its Vice President for Finance and
Administration, the respondent filed on August 10, 2000 a complaint for
illegal suspension and illegal dismissal against Matling and some of its
corporate officers (petitioners) in the NLRC, Sub-Regional Arbitration
Branch XII, Iligan City. The petitioners moved to dismiss the complaint,
raising the ground, among others, that the complaint pertained to the
jurisdiction of the Securities and Exchange Commission (SEC) due to the
controversy being intracorporate inasmuch as the respondent was a member
of Matlings Board of Directors aside from being its Vice-President for
Finance and Administration prior to his termination. The respondent
opposed the petitioners motion to dismiss, insisting that his status as a
member of Matlings Board of Directors was doubtful, considering that he
had not been formally elected as such; that he did not own a single share of
stock in Matling, considering that he had been made to sign in blank an
undated indorsement of the certificate of stock he had been given in 1992;
that Matling had taken back and retained the certificate of stock in its
custody; and that even assuming that he had been a Director of Matling, he
had been removed as the Vice President for Finance and Administration, not
as a Director, a fact that the notice of his termination dated April 10, 2000
showed. On October 16, 2000, the LA granted the petitioners motion to
dismiss, ruling that the respondent was a corporate officer because he was
occupying the position of Vice President for Finance and Administration and
at the same time was a Member of the Board of Directors of Matling; and
that, consequently, his removal was a corporate act of Matling and the
controversy resulting from such removal was under the jurisdiction of the
SEC, pursuant to Section 5, paragraph (c) of Presidential Decree No. 902.
Issue: Whether or not the respondent is a corporate officer within the
jurisdiction of the regular courts.
Held: No. As a rule, the illegal dismissal of an officer or other employee of a
private employer is properly cognizable by the LA. This is pursuant to
Article 217 (a) 2 of the Labor Code, as amended, which provides as follows:
Article 217. Jurisdiction of the 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:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers
may file involving wages, rates of pay, hours of work and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims arising from employer-employee
relations, including those of persons in domestic or household service,
involving an amount exceeding five thousand pesos (P 5,000.00) regardless
of whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases
decided by Labor Arbiters. (c) Cases arising from the interpretation or
implementation of collective bargaining agreements and those arising from
the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements.
Where the complaint for illegal dismissal concerns a corporate officer,
however, the controversy falls under the jurisdiction of the Securities and
Exchange Commission (SEC), because the controversy arises out of intra-
corporate or partnership relations between and among stockholders,
members, or associates, or between any or all of them and the corporation,
partnership, or association of which they are stockholders, members, or
associates, respectively; and between such corporation, partnership, or
association and the State insofar as the controversy concerns their individual
franchise or right to exist as such entity; or because the controversy involves
the election or appointment of a director, trustee, officer, or manager of such
corporation, partnership, or association. Such controversy, among others, is
known as an intra-corporate dispute
Effective on August 8, 2000, upon the passage of Republic Act No. 8799,
otherwise known as The Securities Regulation Code, the SECs jurisdiction
over all intra-corporate disputes was transferred to the RTC, pursuant to
Section 5.2 of RA No. 8799.
Thus, pursuant to the above provision (Section 25 of the Corporation Code),
whoever are the corporate officers enumerated in the by-laws are the
exclusive Officers of the corporation and the Board has no power to create
other Offices without amending first the corporate By-laws. However, the
Board may create appointive positions other than the positions of corporate
Officers, but the persons occupying such positions are not considered as
corporate officers within the meaning of Section 25 of the Corporation Code
and are not empowered to exercise the functions of the corporate Officers,
except those functions lawfully delegated to them. Their functions and
duties are to be determined by the Board of Directors/Trustees.
2.
Moreover, the Board of Directors of Matling could not validly delegate the
power to create a corporate office to the President, in light of Section 25 of
the Corporation Code requiring the Board of Directors itself to elect the
corporate officers. Verily, the power to elect the corporate officers was a
discretionary power that the law exclusively vested in the Board of
Directors, and could not be delegated to subordinate officers or agents. The
office of Vice President for Finance and Administration created by Matlings
President pursuant to By Law No. V was an ordinary, not a corporate, office.
The criteria for distinguishing between corporate officers who may be
ousted from office at will, on one hand, and ordinary corporate employees
who may only be terminated for just cause, on the other hand, do not
depend on the nature of the services performed, but on the manner of
creation of the office. In the respondents case, he was supposedly at once an
employee, a stockholder, and a Director of Matling. The circumstances
surrounding his appointment to office must be fully considered to determine
whether the dismissal constituted an intra-corporate controversy or a labor
termination dispute. We must also consider whether his status as Director
and stockholder had any relation at all to his appointment and subsequent
dismissal as Vice President for Finance and Administration.
DEPARTMENT OF FOREIGN AFFAIRS VS. NATIONAL LABOR
RELATIONS BOARD
G.R. No. 113191, 1996 September 18
FACTS On January 27, 1993, private respondent initiated NLRC-NCR Case
for his alleged illegal dismissal by Asian Development Bank and the latter's
violation of the "labor-only" contracting law. Two summonses were served,
one to the ADB and the other through the DFA. Forthwith, the ADB and the
DFA notified respondent Labor Arbiter that the ADB, as well as its President
and Office, were covered by an immunity from legal processes except for
borrowing, guaranties or the sale of securities pursuant to the Agreement
Establishing the Asian Development Bank (the "Charter") and the
Agreement Between the Bank and the Government of the Philippines
regarding the Banker's Headquarters (the "Headquarters Agreement). The
Labor Arbiter took cognizance of the complaint on the impression that the
ADB had waived its diplomatic immunity from suit. The ADB did not
appeal the decision. Instead, the DFA referred the matter to the NLRC; in its
referral, the DFA sought a "formal vacation of the void jugdgment".
ISSUES 1. Whether the ADB is correct in invoking its immunity from suit
2. Whether the ADB has descended to the level of an ordinary party to a
commercial transaction giving rise to a waiver of its immunity from suit
3. Whether the DFA has the legal standing
RULING1. Yes. The stipulations of both the Charter and the Headquarter's
Agreement establish that, except in the specified cases of borrowing and
guarantee operations, as well as the purchase, sale and underwriting of
securities, the ADB enjoys immunity from legal process of every form. The
Bank's officers, on their part, enjoy immunity in respect of all acts performed
by them in their official capacity. The granting of these immunities and
privileges are treaty covenants ans commitments voluntarily assumed by the
Philippine Government. Being an international organization that has been
extended diplomatic status, the ADB is independent of the municipal law.
2. No. The service contracts referred to by private respondent have not been
intended by the ADB for profit or gain but are official acts over which a waiver
of immunity would not attack.
3. Yes. The DFA's function includes the determination of persons and
institutions covered by diplomatic immunities, a determination which, when
challenged, entitles it to seek relief from the court so as not to seriously impair
the conduct of the country's foreign relations. The DFA must be allowed to
plead its case whenever necessary or advisable to enable it to help to keep the
credibility of the Philippine government before the international community.
USA vs RODRIGO (GR No. 79470)
Genove filed a complaint for damages for his dismissal as cook in the US
Air Force Recreation Center at Camp John Hay Air Station. It had been
ascertained after investigation that Genove had poured urine into the soup
stock used in cooking the vegetables served to the club customers. The club
manager suspended him and thereafter referred the case to a board of
arbitrators, which unanimously found him guilty and recommended his
dismissal.
RULING: The rule that a State may not be sued without its consent is one of
the generally accepted principles of international law that were have adopted
as part of the law of our land. Even without such affirmation, we would still
be bound by the generally accepted principles of international law under the
doctrine of incorporation. Under this doctrine, as accepted by the majority of
the states, such principles are deemed incorporated in the law of every
civilized state as a condition and consequence of its membership in the society
of nations. All states are sovereign equals and cannot assert jurisdiction over
one another. While the doctrine appears to prohibit only suits against the state
without its consent, it is also applicable to complaints filed against officials of
the states for acts allegedly performed by them in the discharge of their duties.
The rule is that if the judgment against such officials will require the state itself
to perform an affirmative act to satisfy the same, the suit must be regarded as
against the state although it has not been formally impleaded. When the
government enters into a contract, it is deemed to have descended to the level
of the other contracting party and divested of its sovereign immunity from
suit with its implied consent.
It bears stressing at this point that the aforesaid principle do not
confer on the USA a blanket immunity for all acts done by it or its agents in
the Philippines. Neither may the other petitioners claim that they are also
insulated from suit in this country merely because they have acted as agents
of the United States in the discharge of their official functions.
There is no question that the USA, like any other state, will be
deemed to have impliedly waived its non-suability if it has entered into a
contract in its proprietary or private capacity (commercial acts/jure gestionis).
It is only when the contract involves its sovereign or governmental capacity
(governmental acts/jure imperii) that no such waiver may be implied.
In US vs RODRIGO, the restaurant services offered at the John Hay
Air Station partake of the nature of a business enterprise undertaken by the
US government in its proprietary capacity, as they were operated for profit,
as a commercial and not a governmental activity. Not even the US
government can claim such immunity because by entering into the
employment contract with Genove in the discharge of its proprietary
functions, it impliedly divested itself of its sovereign immunity from suit. But,
the court still dismissed the complaint against petitioners on the ground that
there was nothing arbitrary about the proceedings in the dismissal of Genove,
as the petitioners acted quite properly in terminating Genove’s employment
for his unbelievably nauseating act.