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NATIONAL LABOR RELATIONS Petitioner then filed a motion for reconsideration, which was denied by the
COMMISSION (Second Division) and PHILIPPINE AIRLINES, INC. G.R. appellate court. Hence, this petition.
No. 107660, January 2, 1995 Issue: Whether the Labor Arbiter had jurisdiction over the case for illegal
dismissal and non-payment of benefits filed by petitioner.
FACTS Ruling: The Court finds that the Labor Arbiter had no jurisdiction over the
Petitioner Ramon C. Lozon, a certified public accountant, was a Senior same.
Finance of Private respondent Philippine Airlines, Inc. (“PAL”), when his ser Under Presidential Decree No. 902-A (the Revised Securities Act), the law in
vices were terminated in the aftermath of the much-publicized “two-billion- force when the complaint for illegal dismissal was instituted by petitioner in
peso PALscam.” 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,
Aggrieved, petitioner, filed with the National Labor Relations Commission ( business associates, its officers or partners, amounting to fraud and
“NLRC”) in Manila for illegal dismissal and for reinstatement, with backwag misrepresentation which may be detrimental to the interest of the public
es and “fringe benefits such as Vacation leave, Sick leave, 13th month pay, C and/or of the stockholders, partners, members of associations or
hristmas Bonus, Medical Expenses, car expenses, trip pass entitlement, etc., p organizations registered with the Commission;
lus moral damages of P40 Million, exemplary damages of P10 Million and re b) Controversies arising out of intra-corporate or partnership relations,
asonable attorney’s fees.” 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
ISSUE:Whether or not the NLRC has jurisdiction over the illegal dismissal c corporation, partnership or association and the State insofar as it concerns
ase in a corporation. 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;
HELD:No. Labor Arbiters have no jurisdiction over termination of corporate d) Petitions of corporations, partnerships, or associations to be declared in
officers and stockholders which, under the law, is considered intra- the state of suspension of payments in cases where the corporation,
corporate dispute. It must be emphasized that a corporate officer’s dismissal partnership or association possesses property to cover all of its debts but
is always a corporate act and/or intra- foresees the impossibility of meeting them when they respectively fall due or
corporate controversy and that nature is not altered by the reason or wisdom in cases where the corporation, partnership or association has no sufficient
which the Board of Directors may have in taking such action. The Regional assets to cover its liabilities, but is under the Management Committee
Trial Courts now have jurisdiction under RA 8799(Securities Regulation Act created pursuant to this decree. (Emphasis supplied.)
of 2000). Jurisdiction of RTC includes adjudication of monetary claims of the The Court has consistently held that there are two elements to be considered
corporate officer who was dismissed, such as unpaid salaries, leaves, 13th m in determining whether the SEC has jurisdiction over the controversy, to wit:
onth pay, damages and attorney’s fee. (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
G.R. No. 144767 March 21, 2002
by the IBC’s General Manager, Ceferino Basilio. In support of his argument,
DILY DANY NACPIL, petitioner,
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
Facts: Petitioner states that he was Assistant General Manager for
the labor courts.
Finance/Administration and Comptroller of private respondent
Intercontinental Broadcasting Corporation (IBC) from 1996 until April 1997.
Petitioner’s argument is untenable. Even assuming that he was in fact
According to petitioner, when Emiliano Templo was appointed to replace
appointed by the General Manager, such appointment was subsequently
IBC President Tomas Gomez III sometime in March 1997, the former
approved by the Board of Directors of the IBC. That the position of
(Templo) told the Board of Directors that as soon as he assumes the IBC
Comptroller is not expressly mentioned among the officers of the IBC in the
presidency, he would terminate the services of petitioner. Apparently,
By-Laws is of no moment, because the IBC’s Board of Directors is
Templo blamed petitioner, along with a certain Mr. Basilio and Mr. Gomez,
empowered under Section 25 of the Corporation Code and under the
for the prior mismanagement of IBC. Upon his assumption of the IBC
corporation’s By-Laws to appoint such other officers as it may deem
presidency, Templo allegedly harassed, insulted, humiliated and pressured
necessary. The By-Laws of the IBC categorically provides:
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
The officers of the corporation shall consist of a President, a Vice-President, a
that petitioner was not the Assistant General Manager/Comptroller of IBC
Secretary-Treasurer, a General Manager, and such other officers as the Board
but merely usurped the powers of the Comptroller. Hence, petitioner filed
of Directors may from time to time does fit to provide for. Said officers shall
with the Labor Arbiter a complaint for illegal dismissal and non-payment of
be elected by majority vote of the Board of Directors and shall have such
powers and duties as shall hereinafter provide (Emphasis supplied).
Instead of filing its position paper, IBC filed a motion to dismiss alleging that
The Court has held that in most cases the “by-laws may and usually do
the Labor Arbiter had no jurisdiction over the case. IBC contended that
provide for such other officers,” and that where a corporate office is not
petitioner was a corporate officer who was duly elected by the Board of
specifically indicated in the roster of corporate offices in the by-laws of a
Directors of IBC; hence, the case qualifies as an intra-corporate dispute
corporation, the board of directors may also be empowered under the by-
falling within the jurisdiction of the Securities and Exchange Commission
laws to create additional officers as may be necessary.
(SEC). However, the motion was denied by the Labor Arbiter in an Order.
An “office” has been defined as a creation of the charter of a corporation,
The Labor Arbiter rendered a Decision stating that petitioner had been
while an “officer” as a person elected by the directors or stockholders. On
illegally dismissed.
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
IBC appealed to the NLRC, but the same was dismissed in a Resolution.
of the corporation who also determines the compensation to be paid to such
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,
As petitioner’s appointment as comptroller required the approval and
which petition was granted by the appellate court in its Decision which
formal action of the IBC’s Board of Directors to become valid, it is clear
reversed and set aside the decision of the Labor Arbiter and the NLRC and
therefore holds that petitioner is a corporate officer whose dismissal may be
dismissed the complaint without prejudice.
the subject of a controversy cognizable by the SEC under Section 5(c) of P.D. Administration, the respondent filed on August 10, 2000 a complaint for
902-A which includes controversies involving both election illegal suspension and illegal dismissal against Matling and some of its
and appointment of corporate directors, trustees, officers, and managers. corporate officers (petitioners) in the NLRC, Sub-Regional Arbitration
Had petitioner been an ordinary employee, such board action would not Branch XII, Iligan City. The petitioners moved to dismiss the complaint,
have been required. raising the ground, among others, that the complaint pertained to the
jurisdiction of the Securities and Exchange Commission (SEC) due to the
Thus, the Court of Appeals correctly held that: controversy being intracorporate inasmuch as the respondent was a member
Since complainant’s appointment was approved unanimously by the Board of Matlings Board of Directors aside from being its Vice-President for
of Directors of the corporation, he is therefore considered a corporate officer Finance and Administration prior to his termination. The respondent
and his claim of illegal dismissal is a controversy that falls under the opposed the petitioners motion to dismiss, insisting that his status as a
jurisdiction of the SEC as contemplated by Section 5 of P.D. 902-A. The rule member of Matlings Board of Directors was doubtful, considering that he
is that dismissal or non-appointment of a corporate officer is clearly an intra- had not been formally elected as such; that he did not own a single share of
corporate matter and jurisdiction over the case properly belongs to the SEC, stock in Matling, considering that he had been made to sign in blank an
not to the NLRC. 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
Considering the foregoing, the Court holds that no error was committed by custody; and that even assuming that he had been a Director of Matling, he
the Court of Appeals in dismissing the case filed before the Labor Arbiter, had been removed as the Vice President for Finance and Administration, not
without prejudice to the filing of an appropriate action in the proper court. as a Director, a fact that the notice of his termination dated April 10, 2000
It must be noted that under Section 5.2 of the Securities Regulation Code showed. On October 16, 2000, the LA granted the petitioners motion to
(Republic Act No. 8799) which was signed into law by then President Joseph dismiss, ruling that the respondent was a corporate officer because he was
Ejercito Estrada on July 19, 2000, the SEC’s jurisdiction over all cases occupying the position of Vice President for Finance and Administration and
enumerated in Section 5 of P.D. 902-A has been transferred to the Regional at the same time was a Member of the Board of Directors of Matling; and
Trial Courts. that, consequently, his removal was a corporate act of Matling and the
controversy resulting from such removal was under the jurisdiction of the
WHEREFORE, the petition is hereby DISMISSED and the Decision of the SEC, pursuant to Section 5, paragraph (c) of Presidential Decree No. 902.
Court of Appeals is AFFIRMED.

RURAL BANK OF CORON PALAWAN, INC. et al. v. ANNALISA Issue: Whether or not the respondent is a corporate officer within the
CORTES jurisdiction of the regular courts.

Annalisa Cortes (Cortes) was the Corporate Secretary of the Rural

Held: No. As a rule, the illegal dismissal of an officer or other employee of a
Bank of Coron and at the same time, Financial Assistant and the Personnel
private employer is properly cognizable by the LA. This is pursuant to
Officer of the two other corporations. Sandra Garcia Escat, daughter of the
Article 217 (a) 2 of the Labor Code, as amended, which provides as follows:
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.
Article 217. Jurisdiction of the Labor Arbiters and the Commission. – (a)
Except as otherwise provided under this Code, the Labor Arbiters shall have
The Labor Arbiter ordered Rural Bank et al. to be jointly and original and exclusive jurisdiction to hear and decide, within thirty (30)
severally liable to pay Annalisa a large amount of monetary award. The Rural calendar days after the submission of the case by the parties for decision
Bank of Coron Palawan, Inc. et al. alleged that the corporations were under without extension, even in the absence of stenographic notes, the following
financial distress and the Rural Bank was under receivership and thus, filed cases involving all workers, whether agricultural or non-agricultural:
their Motion for Reduction of Bond, they prayed that the amount of bond be 1. Unfair labor practice cases;
substantially reduced, preferably one half thereof or even lower. 2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers
The National Labor Relations Commission (NLRC), while noting that may file involving wages, rates of pay, hours of work and other terms and
the petitioners timely filed the appeal, held that the same was not conditions of employment;
accompanied by an appeal bond, a mandatory requirement under Article 223 4. Claims for actual, moral, exemplary and other forms of damages arising
of the Labor Code and Section 6, Rule VI of the NLRC New Rules of from the employer-employee relations;
Procedure. It ordered the dismissal of the complaint. The Court of 5. Cases arising from any violation of Article 264 of this Code, including
Appeals (CA) dismissed the petition. A motion for reconsideration was filed questions involving the legality of strikes and lockouts; and
but the same was dismissed. 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,
ISSUE:Whether or not the decision of the Labor Arbiter is already final and involving an amount exceeding five thousand pesos (P 5,000.00) regardless
executory of whether accompanied with a claim for reinstatement.

HELD:In this case, the motion for reduction of appeal bond was filed only on (b) The Commission shall have exclusive appellate jurisdiction over all cases
the tenth or final day of the reglementary period. Under such circumstance, decided by Labor Arbiters. (c) Cases arising from the interpretation or
the motion for reduction can no longer be deemed to have stayed the appeal, implementation of collective bargaining agreements and those arising from
and the Rural Bank of Coron Palawan, Inc. et al faces the risk, as had the interpretation or enforcement of company personnel policies shall be
happened in this case, of summary dismissal of the appeal for non-perfection. disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements.
Clearly then, the NLRC has no authority to entertain the appeal, much less to
Where the complaint for illegal dismissal concerns a corporate officer,
reverse the decision of the Labor Arbiter. Any amendment or alteration made
however, the controversy falls under the jurisdiction of the Securities and
which substantially affects the final and executory judgment is null and void
Exchange Commission (SEC), because the controversy arises out of intra-
for lack of jurisdiction, including the entire proceeding held for that purpose.
corporate or partnership relations between and among stockholders,
As the court decided, the decision of the Labor Arbiter had become final and
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
MATLING INDUSTRIAL VS COROS (G.R. NO. 157802 OCTOBER 13, 2010) association and the State insofar as the controversy concerns their individual
franchise or right to exist as such entity; or because the controversy involves
Facts: After his dismissal by Matling as its Vice President for Finance and the election or appointment of a director, trustee, officer, or manager of such
corporation, partnership, or association. Such controversy, among others, is by them in their official capacity. The granting of these immunities and
known as an intra-corporate dispute privileges are treaty covenants ans commitments voluntarily assumed by the
Philippine Government. Being an international organization that has been
Effective on August 8, 2000, upon the passage of Republic Act No. 8799, extended diplomatic status, the ADB is independent of the municipal law.
otherwise known as The Securities Regulation Code, the SECs jurisdiction
over all intra-corporate disputes was transferred to the RTC, pursuant to 2. No. The service contracts referred to by private respondent have not been
Section 5.2 of RA No. 8799. intended by the ADB for profit or gain but are official acts over which a waiver
of immunity would not attack.
Thus, pursuant to the above provision (Section 25 of the Corporation Code),
whoever are the corporate officers enumerated in the by-laws are the 3. Yes. The DFA's function includes the determination of persons and
exclusive Officers of the corporation and the Board has no power to create institutions covered by diplomatic immunities, a determination which, when
other Offices without amending first the corporate By-laws. However, the challenged, entitles it to seek relief from the court so as not to seriously impair
Board may create appointive positions other than the positions of corporate the conduct of the country's foreign relations. The DFA must be allowed to
Officers, but the persons occupying such positions are not considered as
plead its case whenever necessary or advisable to enable it to help to keep the
corporate officers within the meaning of Section 25 of the Corporation Code
credibility of the Philippine government before the international community.
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. USA vs RODRIGO (GR No. 79470)
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 Genove filed a complaint for damages for his dismissal as cook in the US
the Corporation Code requiring the Board of Directors itself to elect the Air Force Recreation Center at Camp John Hay Air Station. It had been
corporate officers. Verily, the power to elect the corporate officers was a ascertained after investigation that Genove had poured urine into the soup
discretionary power that the law exclusively vested in the Board of stock used in cooking the vegetables served to the club customers. The club
Directors, and could not be delegated to subordinate officers or agents. The manager suspended him and thereafter referred the case to a board of
office of Vice President for Finance and Administration created by Matlings arbitrators, which unanimously found him guilty and recommended his
President pursuant to By Law No. V was an ordinary, not a corporate, office. dismissal.

The criteria for distinguishing between corporate officers who may be RULING: The rule that a State may not be sued without its consent is one of
ousted from office at will, on one hand, and ordinary corporate employees the generally accepted principles of international law that were have adopted
who may only be terminated for just cause, on the other hand, do not as part of the law of our land. Even without such affirmation, we would still
depend on the nature of the services performed, but on the manner of be bound by the generally accepted principles of international law under the
creation of the office. In the respondents case, he was supposedly at once an doctrine of incorporation. Under this doctrine, as accepted by the majority of
employee, a stockholder, and a Director of Matling. The circumstances the states, such principles are deemed incorporated in the law of every
surrounding his appointment to office must be fully considered to determine civilized state as a condition and consequence of its membership in the society
whether the dismissal constituted an intra-corporate controversy or a labor of nations. All states are sovereign equals and cannot assert jurisdiction over
termination dispute. We must also consider whether his status as Director one another. While the doctrine appears to prohibit only suits against the state
and stockholder had any relation at all to his appointment and subsequent without its consent, it is also applicable to complaints filed against officials of
dismissal as Vice President for Finance and Administration. 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
DEPARTMENT OF FOREIGN AFFAIRS VS. NATIONAL LABOR against the state although it has not been formally impleaded. When the
RELATIONS BOARD government enters into a contract, it is deemed to have descended to the level
G.R. No. 113191, 1996 September 18 of the other contracting party and divested of its sovereign immunity from
suit with its implied consent.
FACTS On January 27, 1993, private respondent initiated NLRC-NCR Case
for his alleged illegal dismissal by Asian Development Bank and the latter's It bears stressing at this point that the aforesaid principle do not
violation of the "labor-only" contracting law. Two summonses were served, confer on the USA a blanket immunity for all acts done by it or its agents in
one to the ADB and the other through the DFA. Forthwith, the ADB and the the Philippines. Neither may the other petitioners claim that they are also
DFA notified respondent Labor Arbiter that the ADB, as well as its President insulated from suit in this country merely because they have acted as agents
and Office, were covered by an immunity from legal processes except for of the United States in the discharge of their official functions.
borrowing, guaranties or the sale of securities pursuant to the Agreement
Establishing the Asian Development Bank (the "Charter") and the 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
Agreement Between the Bank and the Government of the Philippines
contract in its proprietary or private capacity (commercial acts/jure gestionis).
regarding the Banker's Headquarters (the "Headquarters Agreement). The
It is only when the contract involves its sovereign or governmental capacity
Labor Arbiter took cognizance of the complaint on the impression that the
(governmental acts/jure imperii) that no such waiver may be implied.
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". 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
ISSUES 1. Whether the ADB is correct in invoking its immunity from suit US government in its proprietary capacity, as they were operated for profit,
as a commercial and not a governmental activity. Not even the US
2. Whether the ADB has descended to the level of an ordinary party to a government can claim such immunity because by entering into the
commercial transaction giving rise to a waiver of its immunity from suit employment contract with Genove in the discharge of its proprietary
functions, it impliedly divested itself of its sovereign immunity from suit. But,
3. Whether the DFA has the legal standing the court still dismissed the complaint against petitioners on the ground that
there was nothing arbitrary about the proceedings in the dismissal of Genove,
RULING1. Yes. The stipulations of both the Charter and the Headquarter's as the petitioners acted quite properly in terminating Genove’s employment
for his unbelievably nauseating act.
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