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Labor Relations - Jurisdiction

Labor Relations - Jurisdiction

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Published by Stef Macapagal
Labor Relations Digests on the Jurisdiction of the Labor Arbiters, NLRC, DOLE Secretary, etc.
Labor Relations Digests on the Jurisdiction of the Labor Arbiters, NLRC, DOLE Secretary, etc.

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Published by: Stef Macapagal on Jan 22, 2011
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07/26/2013

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S. Macapagal. BSU LAW 2012
 
JURISDICTION
Okol v. SlimmersFACTS: Leslie Okol, a Vice President of Slimmers World, was terminated from employment after an incident with the Bureau of Customs regarding equipment belonging to/consigned to Slimmers World. As such, Okolfiled a complaint with the Arbitration branch of the NLRC against Slimmers World for illegal suspension,illegal dismissal, unpaid commissions, damages, and attorneys fees, with prayer for reinstatement andpayment of backwages. Slimmers World filed a Motion to Dismiss the case, asserting that the NLRC had nojurisdiction over the subject matter of the complaint. Slimmers Worlds motion was sustained, with the laborarbiter ruling that since Okol was the vice president at the time of her dismissal, being a corporate officer, thedispute was an intra-corporate controversy falling outside the jurisdiction of the arbitration branch. Onappeal, the NLRC reversed the LA decision and ordered Slimmers World to reinstate Okol. The CAsubsequently set aside the NLRC decision and ruled that the case was an intra-corporate controversy, andfalls within the jurisdiction of the regular courts pursuant to RA 8799.ISSUE 1: Whether Okol was an employee or corporate officer of Slimmers World.Okol was a CORPORATE OFFICER at the time of her dismissal. According to the Amended By-Laws of Slimmers World which enumerate the power of the board of directors as well as the officers of thecorporation, The general management of the corporation shall be vested in a board of five directors whoshall be stockholders and who shall be elected annually by the stockholders and who shall serve until theelection and qualification of their successors and Like the Chairman of the Board and the President, the VicePresident shall be elected by the Board of Directors from [its] own members. The Vice President shall bevested with all the powers and authority and is required to perform all the duties of the President during theabsence of the latter for any cause. The Vice President will perform such duties as the Board of Directors mayimpose upon him from time to time. This clearly shows that Okol was a director and officer of SlimmersWorld.
y
 
An office is created by the charter of the corporation and the officer is elected by the directors andstockholders. On the other hand, an employee usually occupies no office and generally is employednot by action of the directors or stockholders but by the managing officer of the corporation who alsodetermines the compensation to be paid to such employee.ISSUE 2: W/N the NLRC has jurisdiction over the illegal dismissal case filed by Okol.NO. Since it has been shown that Okol was a corporate officer, her charges of illegal suspension, illegaldismissal, unpaid commissions, reinstatement and backwages against Slimmers World fall squarely withinthe ambit of intra-corporate disputes. A corporate officers dismissal is always a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation. The question of remunerationinvolving a stockholder and officer, not a mere employee, is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplationof the Corporate Code. The determination of the rights of a director and corporate officer dismissed from hisemployment as well as the corresponding liability of a corporation, if any, is an intra-corporate disputesubject to the jurisdiction of the regular courts.
y
 
Prior to its amendment, Section 5 of PD 902-A provided that intra-corporate disputes fall within thejurisdiction of the SEC. Subsection 5.2, Section 5 of RA 8799, transferred to RTCs the SECsjurisdiction over all cases listed in Section 5 of PD 902-A.
 
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S. Macapagal. BSU LAW 2012
 
CA affirmed. Petition denied, without prejudice to Okols taking recourse to and seeking relief through theappropriate remedy in the proper forum.
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J
urisdiction over the subject matter is conferred by law.Tiangco v. UniwideFACTS: Gina Tiangco and Salvacion Manego were employees of Uniwide Sales Warehouse Club. In 2001, theyboth filed separate complaints for illegal dismissal, payment of separation pay, as well as award for moral andexemplary damages in the NLRC. Uniwide prayed that the proceedings on both cases be suspended on theground that Uniwide had been placed in a state of suspension of payments by the SEC as early as April 2000and a receivership committee had in fact been appointed. The LA suspended the proceedings until furtherorders from the SEC.In 2004, Tiangco and Manego filed a motion to reopen the case on the ground that the SEC, in itsorder in 2002, had already approved the second amendment to the rehabilitation plan of Uniwide. Uniwideopposed the motion. The LA ordered both parties to file their memoranda, stating that even without the saidmemoranda, the cases would be ordered submitted for decision after the lapse of the period for filing. Thisprompted Uniwide to file a petition for certiorari with the CA with a prayer for a TRO, imputing a grave abuseof discretion on the part of the LA. The CA granted the TRO and subsequently ruled that proceedings on thecases should remain suspended until further orders from the SEC.ISSUE 1: W/N the consolidated illegal dismissal cases can be reopened at this point of the SEC proceedings.NO. In previous cases, it had been held that a labor claim is a claim within the contemplation of PD 902-A, asamended. Thus, they are included among the actions suspended upon the placing under rehabilitation of employer-corporations. No exception in favor of a labor claim is mentioned in the law. Allowing labor cases toproceed clearly defeats the purpose of the automatic stay and severely encumbers the management committees time and resources. To rule otherwise would open the floodgates to other similarly situatedclaimants and forestall if not defeat the rescue efforts.
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PD 902-A: Upon appointment of a management committee, rehabilitation receiver, board, or body,all actions for claims against corporations, partnerships or associations under management orreceivership pending before any court, tribunal, board or body shall be suspended accordingly.
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CLAIM  refers to debts or demands of a pecuniary nature; assertion of rights for thepayment of money
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Purpose of Automatic Stay: To enable the management committee or the rehabilitationreceiver to effectively exercise its/his powers free from any judicial or extra-judicialinterference that might duly hinder or prevent the rescue of the debtor company. To allowsuch other actions to continue would only add to the burden of the management committeeor rehabilitation receiver, whose time, effort and resources would be wasted in defendingclaims against the corporation instead of being directed towards its restructuring andrehabilitation.CA affirmed. Petition denied.
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Article 217 of the Labor Code should be construed not in isolation but in harmony with PD 902-A.True, the NLRC has the power to hear and decide labor disputes, but such authority is deemedsuspended when PD 902-A is put into effect by the SEC.
 
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S. Macapagal. BSU LAW 2012
 
Bombo Radyo v. Secretary of LaborFACTS:
J
andeleon
J
uezan filed a complaint against Bombo Radyo Philippines for illegal deduction, non-payment of service incentive leave, 13
th
month pay, premium pay for holiday and rest day and illegaldiminution of benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG, and PhilHealth beforethe DOLE Regional Office in Cebu City. Based on the complaint, the DOLE conducted a plant level inspectionand noted that Bombo Radyo denied having an employer-employee relationship with
J
uezan, claiming that hewas only a drama talent hired on a per drama participation basis.The DOLE Regional Director ruled that 
J
uezan was an employee of Bombo Radyo, and that he wasentitled to his money claims. On appeal to the DOLE Secretary, Bombo Radyo denied once more the existenceof employer-employee relationship. The Acting DOLE Secretary dismissed the appeal on the ground that Bombo Radyo did not post a cash or surety bond and instead submitted a Deed of Assignment of Bank Deposit. Bombo Radyo appealed again to the CA, maintaining that there was no employer-employeerelationship because it was the drama directors and producers who paid, supervised, and disciplined
J
uezan.It also added that the case was beyond the jurisdiction of the DOLE and should have been considered by theLabor Arbiter because
J
uezans claim exceeded P5,000.00. As his appeal was denied,
J
uezan elevated the caseto the Supreme Court, stating that the NLRC, not the DOLE Secretary, has jurisdiction over its claim, in view of Articles 217 and 128 of the Labor Code.ISSUE 1: W/N the Secretary of Labor has the power to determine the existence of an employer-employeerelationship.NO. Article 128 is quite explicit that the visitorial and enforcement power of the DOLE comes into play onlyin cases when the relationship of employer-employee still exists. The clause in cases where therelationship of employer-employee still exists signifies that the employer-employee relationship must haveexisted even before the emergence of the controversy. Necessarily, the DOLEs power does not apply in twocircumstances, namely: (a) where the employer-employee relationship has ceased; and (b) where no suchrelationship has ever existed. Thus, before the DOLE may exercise its powers under Article 128, twoimportant questions must be resolved: (a) does the employer-employee relationship still exist, oralternatively, was there ever an employer-employee relationship to speak of; and (b) are there violations of the Labor Code or of any labor law? A mere assertion of absence of employer-employee relationship does not deprive the DOLE jurisdiction over the claim under Article 128 of the Labor Code. At least a
 prima facie
showing of such absence of relationship, as in this case, is needed to preclude the DOLE from the exercise of its power. The Secretary of Labor would not have been precluded from exercising the powers under Article128(b) over Bombo Radyo if another person with better-grounded claim of employment than that which
J
uezan had. Without a doubt, Bombo Radyo, since the inception of the case had been consistent in maintainingthat 
J
uezan is not its employee. Certainly, a preliminary determination, based on the evidence offered, andnoted by the Labor Inspector during the inspection as well as submitted during the proceedings before theRegional Director, puts in genuine doubt the existence of employer-employee relationship. From that point on, the prudent recourse on the part of the DOLE should have been to refer
J
uezan to the NLRC for the properdispensation of his claims.The law accords a prerogative to the NLRC over the claim when the employer-employee relationship hasterminated or such relationship has not arisen at all. The existence of an employer-employee relationship is amatter which is not easily determinable from an ordinary inspection, necessarily so, because the elements of such a relationship are not verifiable from a mere ocular examination. The intricacies and implications of anemployer-employee relationship demand that the level of scrutiny should be far above the cursory and themechanical. More often than not, the question of employer-employee relationship becomes a battle of 

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