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Labor Relations Batch II Cases - 1

THIRD DIVISION

G.R. No. 107660 January 2, 1995


RAMON
C.
LOZON, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Second
Division) and PHILIPPINE AIRLINES, INC.,respondents.

VITUG, J.:
Petitioner Ramon C. Lozon, a certified public accountant, was a
Senior
Vice-President-Finance of Private respondent Philippine Airlines,
Inc. ("PAL"), when his services were terminated on 19 December
1990 in the aftermath of the much-publicized "two-billion-peso
PALscam." Lozon started to work for the national carrier on 23
August 1967 and, for twenty-three years, steadily climbed the
corporate ladder until he became one of its vice-presidents. 1
His termination from the service was spawned by a letter sent
some time in June 1990 by a member of PAL's board of directors,
then Solicitor General Francisco Chavez, to PAL President Dante
Santos. Chavez demanded an investigation of twenty-three
irregularities allegedly committed by twenty-two high-ranking PAL
officials. Among these officials was petitioner; he had been
administratively charged by Romeo David, Senior Vice-President
for Corporate Services and Logistics Group, for his (Lozon)
purported involvement in four cases, labeled "Goldair,"
"Autographics," "Big Bang of 1983" and "Middle
East." 2 Pending the investigation of these cases by a
panel 3 constituted by then President Corazon C. Aquino,
petitioner was placed under preventive suspension.
In the organizational meeting of the PAL board of directors on 19
October 1990 which occasion Feliciano R. Belmonte, Jr., was
elected chairman of the board while Dante G. Santos was
designated president and chief executive officer, 4 the board
deferred action on the election or appointment of some senior
officers of the company who, like petitioner, had been charged
with various offenses.
On 18 January 1991, the PAL board of directors issued two
resolutions relative to the investigation conducted by the
presidential investigating panel in the "Autographics" and
"Goldair" cases. In "Autographics," petitioner was charged, along
with three other officials, 5 with "gross inefficiency, negligence,
imprudence, mismanagement, dereliction of duty, failure to

observe and/or implement administrative and executive policies"


and with the "concealment, or cover-up and prevention of the
seasonal discovery of the anomalous transactions" had with
Autographics, Inc., resulting in, among other things, an
overpayment by PAL to Autographics in the amount of around P12
million. Petitioner was forthwith considered "resigned from the
service . . . for loss of confidence and for acts inimical to the
interests of the company." 6 A similar conclusion was arrived at by
the PAL board of directors with regard to petitioner in the "Goldair"
case where he, together with six other PAL officials, 7 were
charged with like "offenses" that had caused PAL's defraudation
by Goldair, PAL's general sales agent in Australia, of 14.6 million
Australian dollars. 8
Aggrieved by the action taken by the PAL board of directors,
petitioner, on 26 June 1991 filed with the National Labor Relations
Commission ("NLRC") in Manila a complaint (docketed NLRCNCR Case No. 00-06-03684-91) for illegal dismissal and for
reinstatement, with backwages and "fringe benefits such as
Vacation leave, Sick leave, 13th month pay, Christmas Bonus,
Medical Expenses, car expenses, trip pass entitlement, etc., plus
moral damages of P40 Million, exemplary damages of P10 Million
and reasonable attorney's fees." 9
On 09 August 1991, 10 the PAL board of directors also held
petitioner as "resigned from the company" for loss of confidence
and for acts inimical to the interests of the company in the "Big
Bang of 1983" case for his alleged role in the irregularities that
had precipitated the write-down (write-off) of assets amounting to
P553 million from the books and financial statements of PAL. 11 In
the "Middle East" case, the PAL board of directors, on the
anomalous administration of commercial marketing arrangements
in which PAL had lost an estimated P120 million. 12
PAL defended the validity of petitioner's dismissal before the
Labor Arbiter. It questioned at the same time the jurisdiction of the
NLRC, positing the theory that since the investigating panel was
constituted by then President Aquino, said panel, along with the
PAL board of directors, became "a parallel arbitration unit" which,
in legal contemplation, should be deemed to have substituted for
the NLRC. Thus, PAL averred, petitioner's recourse should have
been to appeal his case to the Office of the President. 13 On the
other hand, petitioner questioned the authority of the panel to
conduct the investigation, asseverating that the charges leveled
against him were purely administrative in nature that could have
well been ventilated under the grievance procedure outline in
PAL's Code of Discipline.
On 17 March 1992, Labor Arbiter Jose G. de Vera rendered a
decision ruling for petitioner. 14 The decretal portion of the decision
read:

Labor Relations Batch II Cases - 2


WHEREFORE, all the foregoing premises
being considered, judgment is hereby
rendered ordering the respondent
Philippine Airlines, Inc., to reinstate the
complainant to his former position with all
the rights, privileges, and benefits
appertaining thereto plus backwages, which
as of March 15, 1992 already amounted to
P2,632,500.00, exclusive of fringes.
Further, the respondent company is ordered
to pay complainant as follows: P5,000.00
as moral damages; P1,000,000.00 as
exemplary damages, and attorney's fees
equivalent to ten percent (10%) of all of the
foregoing awards.
SO ORDERED. 15
A day after promulgating the decision, the labor arbiter issued a
writ of execution. PAL filed a motion to quash the writ petitioner
promptly opposed. After the labor arbiter had denied the motion to
quash, PAL filed a petition for injunction with the NLRC (docketed
NLRC IC Case No. 00261-92). No decision was rendered by
NLRC on this petition. 16
Meanwhile, PAL appealed the decision of the labor arbiter by filing
a memorandum on appeal, 17 assailing, once again, the
jurisdiction of the NLRC but this time on the ground that the issue
pertaining to the removal or dismissal of petitioner, a corporate
officer, was within the exclusive and original jurisdiction of the
Securities and Exchange Commission ("SEC"). Petitioner
interposed a partial appeal praying for an increase in the amount
of moral and exemplary damages awarded by the labor arbiter. 18
On 24 July 1992, the NLRC rendered a decision (in NLRC NCR
Case No. 00-06-03684-91) 19 dismissing the case on the strength
of PAL's new argument on the issue of jurisdiction. 20 Petitioner's
motion for reconsideration was denied by the NLRC.
The instant petition for certiorari filed with this Court raises these
issues: (a) Whether or not the NLRC has jurisdiction over the
illegal dismissal case, and (b) on the assumption that the SEC
has that jurisdiction, whether or not private respondent is
estopped from raising NLRC's lack of jurisdiction over the
controversy.
We sustain NLRC's dismissal of the case.
Presidential Decree No. 902-A confers on the SEC original and
exclusive jurisdiction to hear and decide controversies and cases
involving

a. Intra-corporate and partnership relations


between or among the corporation, officers
and stockholders and partners, including
their elections or appointments;
b. State and corporate affairs in relation to
the legal existence of corporations,
partnerships and associations or to their
franchises; and
c. Investors and corporate affairs,
particularly in respect of devices and
schemes, such as fraudulent practices,
employed by directors, officers, business
associates, and/or other stockholders,
partners, or members of registered firms; as
well as
d. Petitions for suspension of payments
filed by corporations, partnerships or
associations possessing sufficient property
to cover all their debts but which foresee
the impossibility of meeting them when they
respectively fall due, or possessing
insufficient assets to cover their liabilities
and said entities are upon petition or motu
propio, placed under the management of a
Rehabilitation Receiver or Management
Committee.
Specifically, in intra-corporate matters concerning the election or
appointment of officers of a corporation, the decree provides:
Sec. 5. In addition to the regulatory and
adjudicative functions of the Securities and
Exchange Commission over corporations,
partnerships and other forms of association
registered with it as expressly granted
under existing laws and decrees, it shall
have original and exclusive jurisdiction to
hear and decide cases involving:
xxx xxx xxx
(c) Controversies in the election or
appointments of directors, trustees, officers
or managers of such corporations,
partnerships or association.
Petitioner himself admits that vice presidents are senior members
of
management, 21 whose designations are no longer than just by
means of ordinary promotions. In his own case, petitioner has

Labor Relations Batch II Cases - 3


been elected to the position of Senior Vice-President Finance
Group by PAL's board of directors at its organizational meeting
held on 20 October 1989 pursuant to the By-laws, 22 under which,
he would serve for a term of one year and until his successor
shall have been elected and qualified. 23 Petitioner, for reasons
already mentioned, did not get to be re-elected thereafter. 24
In Fortune Cement Corporation v. NLRC, 25 the Court has quoted
with approval the Solicitor General's contention 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." Not the least insignificant in the case at bench is that
petitioner's dismissal is intertwined with still another intracorporate affair, earlier so ascribed as the "two-billion-peso
PALscam," that inevitably places the case under the specialized
competence of the SEC and well beyond the ambit of a labor
arbiter's normal jurisdiction under the general provisions of Article
217 of the Labor Code. 26
Petitioner contends that the jurisdiction of the SEC excludes its
cognizance over claims for vacation and sick leaves, 13th month
pay, Christmas bonus, medical expenses, car expenses, and
other benefits, as well as for moral damages and attorney's
fees. 27 Dy v. NLRC 28 categorically states that the question of
remuneration being asserted by an officer of a corporation is "not
a simple labor problem but a matter that comes within the area of
corporate affairs and management, and is in fact, a corporate
controversy in contemplation of the Corporation Code." With
regard to the matter of damages, in Andaya v.
Abadia 29 where, in a complaint filed before the Regional Trial
Court, the president and general manager of the Armed Forces
and Police Savings and Loan Association ("AFPSLAI") questioned
his ouster from the stewardship of the association, this Court, in
dismissing the petition assailing the order of the trial court which
ruled that SEC, not the regular courts, had jurisdiction over the
case, has said:
The allegations against herein respondents
in the amended complaint unquestionably
reveal intra-corporate controversies cleverly
conceals, although unsuccessfully, by use
of civil law terms and phrases. The
amended complaint impleads herein
respondents who, in their capacity as
directors of AFPSLAI, allegedly convened
an illegal meeting and voted for the
reorganization of management resulting in
petitioner's
ouster
as
corporate
officer. While it may be said that the same
corporate acts also give rise to civil liability
for damages, it does not follow that the
case is necessarily taken out of the
jurisdiction of the SEC as it may award

damages which can be considered


consequential in the exercise of its
adjudicative powers. Besides, incidental
issues that properly fall within the authority
of a tribunal may also be considered by it to
avoid multiplicity of actions. Consequently,
in intra-corporate matters such as those
affecting the corporation, its directors,
trustees, officers, shareholders, the issue of
consequential damages may just as well be
resolved and adjudicated by the SEC.
(Emphasis supplied.)
We here reiterate the above holdings for, indeed, controversies
within the purview of Section 5 of P.D. No. 902-A must not be so
constricted as to deny to the SEC the sound exercise of its
expertise and competence in resolving all closely related aspects
of such corporate disputes.
Petitioner maintains that PAL is estopped, nevertheless, from
questioning the jurisdiction of the NLRC considering that PAL did
not hold the dispute to be intra-corporate until after the case had
already been brought on appeal to the NLRC.
In the first place, there would not be much basis to indicate that
PAL was "effectively barred by estoppel." 30 As early as the initial
stages of the controversy PAL had already raised the issue of
jurisdiction albeit mistakenly at first on the ground that petitioner's
recourse was an appeal to the Office of the President. The error
could not alter the fact that PAL did question even then the
jurisdiction of both the labor arbiter and the NLRC.
It has long been the established rule, moreover, that jurisdiction
over a subject matter is conferred by law, 31 and the question of
lack of jurisdiction may be raised at anytime even on appeal. 32 In
the recent case of La Naval Drug Corporation vs. Court of
Appeals, G.R. No. 103200, 31 August 1994, this Court said:
Lack of jurisdiction over the subject matter
of the suit is yet another matter. Whenever
it appears that the court has no jurisdiction
over the subject matter, the action shall be
dismissed (Section 2, Rule 9, Rules of
Court). This defense may be interpose at
any time, during appeal (Roxas vs. Rafferty,
37 Phil. 957) or even after final judgment
(Cruzcosa vs. Judge Concepcion, et al.,
101 Phil. 146). Such is understandable, as
this kind of jurisdiction is conferred by law
and not within the courts, let alone the
parties, to themselves determine or
conveniently
set
aside.
In People

Labor Relations Batch II Cases - 4


vs. Casiano (111 Phil. 73, 93-94), this
Court, on the issue of estoppel, held:
"The operation of the
principle of estoppel
on the question of
jurisdiction seemingly
depends
upon
whether the lower
court actually had
jurisdiction or not. If it
had no jurisdiction,
but the case was tried
and decided upon the
theory that it had
jurisdiction,
the
parties
are
not
barred, on appeal,
from assailing such
jurisdiction, for the
same "must exist as a
matter of law, and
may not be conferred
by consent of the
parties
or
by
estoppel" (5 C.J.S.,
861-863). However, if
the lower court had
jurisdiction, and the
case was heard and
decided upon a given
theory, such, for
instance, as that the
court
had
no
jurisdiction, the party
who induced it to
adopt such theory will
not be permitted, on
appeal, to assume a
inconsistent position
that the lower
court had jurisdiction.
Here, the principle of
estoppel applies. The
rule that jurisdiction is
conferred by law, and
does not depend
upon the will of the
parties,
has
no
bearing thereon."
Petitioner points to "PAL's scandalous duplicity" in questioning the
jurisdiction of the NLRC in this particular controversy while
upholding it (NLRC's jurisdiction) in "Robin Dui v. Philippine

Airlines" (Case No. 00-4-20267) pending before the Commission.


We need not delve into whether or not PAL's conduct does indeed
smack of opportunities; suffice it to say that Robin Dui is entirely
an independent and separate case and, more than that, it is not
before us in this instance.
WHEREFORE, the herein petition for certiorari is DISMISSED,
and the decision appealed from is AFFIRMED, without prejudice
to petitioner's seeking, if circumstances permit, a recourse in the
proper forum. No costs.
SO ORDERED.
Bidin, Romero and Melo, JJ., concur.
FIRST DIVISION
G.R. No. 144767

March 21, 2002

DILY
DANY
vs.
INTERNATIONAL
CORPORATION, respondent.

NACPIL, petitioner,
BROADCASTING

KAPUNAN, J.:
This is a petition for review on certiorari under Rule 45, assailing
the Decision of the Court of Appeals dated November 23, 1999 in
CA-G.R. SP No. 527551 and the Resolution dated August 31,
2000 denying petitioner Dily Dany Nacpil's motion for
reconsideration. The Court of Appeals reversed the decisions
promulgated by the Labor Arbiter and the National Labor
Relations Commission (NLRC), which consistently ruled in favor
of petitioner.
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 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, allegedly because he had not yet secured the
clearances from the Presidential Commission on Good
Government and the Commission on Audit. Furthermore, Templo
allegedly refused to recognize petitioner's employment, claiming

Labor Relations Batch II Cases - 5


that petitioner was not the Assistant General Manager/Comptroller
of IBC but merely usurped the powers of the Comptroller. Hence,
in 1997, petitioner filed with the Labor Arbiter a complaint for
illegal dismissal and non-payment of benefits.1wphi1.nt
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 dated April
22, 1998.2
On August 21, 1998, the Labor Arbiter rendered a Decision stating
that petitioner had been illegally dismissed. The dispositive
portion thereof reads:
WHEREFORE, in view of all the foregoing, judgment is
hereby rendered in favor of the complainant and
against all the respondents, jointly and severally,
ordering the latter:
1. To reinstate complainant to his former
position without diminution of salary or loss
of seniority rights, and with full backwages
computed from the time of his illegal
dismissal on May 16, 1997 up to the time of
his actual reinstatement which is tentatively
computed as of the date of this decision on
August 21, 1998 in the amount of
P1,231,750.00 (i.e., P75,000.00 a month x
15.16 months = P1,137,000.00 plus
13th month pay equivalent to 1/12 of P
1,137,000.00 = P94,750.00 or the total
amount of P 1,231,750.00). Should
complainant be not reinstated within ten
(10) days from receipt of this decision, he
shall be entitled to additional backwages
until actually reinstated.
2. Likewise, to pay complainant the
following:
a) P 2 Million as and for moral damages;
b) P500,000.00 as and for exemplary
damages; plus and (sic)
c) Ten (10%) percent thereof as and for
attorney's fees.

SO ORDERED.3
IBC appealed to the NLRC, but the same was dismissed in a
Resolution dated March 2, 1999, for its failure to file the required
appeal bond in accordance with Article 223 of the Labor
Code.4 IBC then filed a motion for reconsideration that was
likewise denied in a Resolution dated April 26, 1999.5
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 dated November 23, 1999. The dispositive portion
of said decision states:
WHEREFORE, premises considered, the petition for
Certiorari is GRANTED. The assailed decisions of the
Labor Arbiter and the NLRC are REVERSED and SET
ASIDE and the complaint is DISMISSED without
prejudice.
SO ORDERED.6
Petitioner then filed a motion for reconsideration, which was
denied by the appellate court in a Resolution dated August 31,
2000.
Hence, this petition.
Petitioner Nacpil submits that:
I.
THE COURT OF APPEALS ERRED IN FINDING
THAT PETITIONER WAS APPOINTED BY
RESPONDENT'S BOARD OF DIRECTORS AS
COMPTROLLER. THIS FINDING IS CONTRARY TO
THE COMMON, CONSISTENT POSITION AND
ADMISSION OF BOTH PARTIES. FURTHER,
RESPONDENT'S BY-LAWS DOES NOT INCLUDE
COMPTROLLER AS ONE OF ITS CORPORATE
OFFICERS.
II.
THE COURT OF APPEALS WENT BEYOND THE
ISSUE OF THE CASE WHEN IT SUBSTITUTED THE
NATIONAL LABOR RELATIONS COMMISSION'S
DECISION TO APPLY THE APPEAL BOND
REQUIREMENT STRICTLY IN THE INSTANT CASE.
THE ONLY ISSUE FOR ITS DETERMINATION IS
WHETHER NLRC COMMITTED GRAVE ABUSE OF
DISCRETION IN DOING THE SAME.7

Labor Relations Batch II Cases - 6


The issue to be resolved is whether the Labor Arbiter had
jurisdiction over the case for illegal dismissal and non-payment of
benefits filed by petitioner. 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;

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.9 He therefore contends that his dismissal is a controversy
falling within the jurisdiction of the labor courts.10
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.11 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 Code12 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

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.8
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

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).13
The Court has held that in most cases the "by-laws may and
usually do provide for such other officers,"14 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.15
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.16
As petitioner's appointment as comptroller required the approval
and formal action of the IBC's Board of Directors to become
valid,17 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.18 Had petitioner been an ordinary employee, such
board action would not have been required.
Thus, the Court of Appeals correctly held that:

Labor Relations Batch II Cases - 7


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.19

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. 1wphi1.nt

As to petitioner's argument that the nature of his functions is


recommendatory thereby making him a mere managerial officer,
the Court has previously held that the relationship of a person to a
corporation, whether as officer or agent or employee is not
determined by the nature of the services performed, but instead
by the incidents of the relationship as they actually exist.20

WHEREFORE, the petition is hereby DISMISSED and the


Decision of the Court of Appeals in CA-G.R. SP No. 52755
is AFFIRMED.

It is likewise of no consequence that petitioner's complaint for


illegal dismissal includes money claims, for such claims are
actually part of the perquisites of his position in, and therefore
linked with his relations with, the corporation. The inclusion of
such money claims does not convert the issue into a simple labor
problem. Clearly, the issues raised by petitioner against the IBC
are matters that come within the area of corporate affairs and
management, and constitute a corporate controversy in
contemplation of the Corporation Code.21

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.25

SO ORDERED.
Davide, Jr., C.J., and Ynares-Santiago, JJ., concur.
THIRD DIVISION
G.R. No. 141093

February 20, 2001

PRUDENTIAL BANK and TRUST COMPANY, petitioner,


vs.
CLARITA T. REYES, respondent.

Petitioner further argues that the IBC failed to perfect its appeal
from the Labor Arbiter's Decision for its non-payment of the
appeal bond as required under Article 223 of the Labor Code,
since compliance with the requirement of posting of a cash or
surety bond in an amount equivalent to the monetary award in the
judgment appealed from has been held to be both mandatory and
jurisdictional.22 Hence, the Decision of the Labor Arbiter had long
become final and executory and thus, the Court of Appeals acted
with grave abuse of discretion amounting to lack or excess of
jurisdiction in giving due course to the IBC's petition for certiorari,
and in deciding the case on the merits.

GONZAGA-REYES, J.:

The IBC's failure to post an appeal bond within the period


mandated under Article 223 of the Labor Code has been rendered
immaterial by the fact that the Labor Arbiter did not have
jurisdiction over the case since as stated earlier, the same is in
the nature of an intra-corporate controversy. The Court has
consistently held that where there is a finding that any decision
was rendered without jurisdiction, the action shall be dismissed.
Such defense can be interposed at any time, during appeal or
even after final judgment.23 It is a well-settled rule that jurisdiction
is conferred only by the Constitution or by law. It cannot be fixed
by the will of the parties; it cannot be acquired through, enlarged
or diminished by, any act or omission of the parties.24

The case stems from NLRC NCR Case No.00-06-03462-92,


which is a complaint for illegal suspension and illegal dismissal
with prayer for moral and exemplary damages, gratuity, fringe
benefits and attorney's fees filed by Clarita Tan Reyes against
Prudential Bank and Trust Company (the Bank) before the labor
arbiter. Prior to her dismissal, private respondent Reyes held the
position of Assistant Vice President in the foreign department of
the Bank, tasked with the duties, among others, to collect checks
drawn against overseas banks payable in foreign currency and to
ensure the collection of foreign bills or checks purchased,
including the signing of transmittal letters covering the same.

Before the Court is a petition for review on certiorari of the


Decision,1 dated October 15, 1999 of the Court of Appeals in
C.A.-G.R. SP No. 30607 and of its Resolution, dated December 6,
1999 denying petitioner's motion for reconsideration of said
decision. The Court of Appeals reversed and set aside the
resolution2 of the National Labor Relations Commission (NLRC) in
NLRC NCR CA No.009364-95, reversing and setting aside the
labor arbiter's decision and dismissing for lack of merit private
respondent's complaint.3

Labor Relations Batch II Cases - 8


After proceedings duly undertaken by the parties, judgment was
rendered by labor Arbiter Cornelio L. Linsangan, the dispositive
portion of which reads:
"WHEREFORE, finding the dismissal of complainant to
be without factual and legal basis, judgment is hereby
rendered ordering the respondent bank to pay her
back wages for three (3) years in the amount of
P540,000.00 (P15,000.00 x 36 mos.). In lieu of
reinstatement, the respondent is also ordered to pay
complainant separation pay equivalent to one month
salary for every year of service, in the amount of
P420,000.00 (P15,000 x 28 mos.). In addition, the
respondent should. also pay complainant profit sharing
and unpaid fringe benefits. Attorney's fees equivalent
to ten (10%) percent of the total award should likewise
be paid by respondent.

In reply, complainant requested for an extension of one


week to submit her explanation. In a "subsequent
letter, dated March 14, 1991, to the president,
complainant stated that in view of the refusal of the
Bank that she be furnished copies of the pertinent
documents she is requesting and the refusal to grant
her a reasonable period to prepare her answer, she
was constrained to make a general denial of any
misfeasance or malfeasance on her part and asked
that a formal investigation be made.
As the complainant failed to attend and participate in
the formal investigation conducted by the Committee
on May 24, 1991, despite due notice, the Committee
proceeded with its hearings and heard the testimonies
of several witnesses.
The Committee's findings were:

SO ORDERED."4
Not satisfied, the Bank appealed to the NLRC which, as
mentioned at the outset, reversed the Labor Arbiter's decision in
its Resolution dated 24 March 1997. Private respondent sought
reconsideration which, however, was denied by the NLRC in its
Resolution of 28 July 1998. Aggrieved, private respondent
commenced on October 28, 1998, a petition for certiorari before
the Supreme Court.5 The subject petition was referred to the
Court of Appeals for appropriate action and disposition per
resolution of this Court dated November 25, 1998, in accordance
with the ruling in St. Marlin Funeral Homes vs. NLRC.6
In its assailed decision, the Court of Appeals adopted the
following antecedent facts leading to Reyes's dismissal as
summarized by the NLRC:
"The auditors of the Bank discovered that two checks,
No.011728-7232-146,
in
the
amount
of
US$109,650.00, and No. 011730-7232-146, in the
amount of US$115,000.00, received by the Bank on
April 6, 1989, drawn ,by the Sanford Trading against
Hongkong and Shanghai Banking Corporation, Jurong
Branch, Singapore, in favor of Filipinas Tyrom, were
not sent out for collection to Hongkong Shanghai
Banking Corporation on the alleged order of the
complainant until the said checks became stale.

'a) The two (2) HSBC checks were received


by the Foreign Department on 6 April 1989.
On the same day, complainant authorized
the crediting of the account of Filipinas
Tyrom in the amount of P4,780,102.70
corresponding to the face value of the
checks, (Exhibits 6, 22 to 22-A and 23 to
23-A). On the following day, a transmittal
letter was prepared by Ms. Cecilia Joven, a
remittance clerk then assigned in the
Foreign Department, for the purpose of
sending out the two (2) HSBC checks for
collection. She then requested complainant
to sign the said transmittal letters (Exhibits
1, 7 and 25; TSN, 11 March 1993, pp. 4252), as it is complainant who gives her
instructions directly concerning the
transmittal of foreign bills purchased. All
other transmittal letters are in fact signed by
complainant.

The Bank created a committee to investigate the


findings of the auditors involving the two checks which
were not collected and became stale.

b) After Ms. Joven delivered the transmittal


letters and the checks to the Accounting
Section of the Foreign Department,
complainant instructed her to withdraw the
same for the purpose of changing the
addressee thereon from American Express
Bank to Bank of Hawaii (ibid.) under a
special collection scheme (Exhibits 4 and 5
to 5-B).

On March 8, 1991, the president of the Bank issued a


memorandum to the complainant informing her of the
findings of the auditors and asked her to give her side.

c) After complying with complainant's


instruction, Ms. Joven then returned to
complainant for the latter to sign the new

Labor Relations Batch II Cases - 9


transmittal letters. However, complainant
told Ms. Joven to just hold on to the letters
and checks and await further instructions
(ibid.). Thus, the new transmittal letters
remained unsigned. (See Exhibits 5 to 5-B).
d) In June 1989, Ms. Joven was transferred
to another department. Hence, her duties,
responsibilities and functions, including the
responsibility over the two (2) HSBC
checks, were turned over to another
remittance clerk, Ms. Analisa Castillo
(Exhibit 14; TSN, 4 June 1993, pp. 27-29).
e) When asked by Ms. Castillo about the
two (2) HSBC checks, Ms. Joven relayed to
the latter complainant's instruction (Exhibit
14; TSN, 4 June 1993, p. 42).
f) About fifteen (15) months after the HSBC
checks were received by the Bank, the said
checks were discovered in the course of an
audit conducted by the Bank's auditors.
Atty. Pablo Magno, the Bank's legal
counsel, advised complainant to send the
checks for collection despite the lapse of
fifteen (15) months.
g) Complainant, however, deliberately
withheld Atty. Magno's advice from her
superior, the Senior Vice-President, Mr.
Renato Santos and falsely informed the
latter that Atty . Magno advised that a
demand letter be sent instead, thereby
further delaying the collection of the HSBC
checks.
h) On 10 July 1990, the HSBC checks were
finally sent for collection, but were returned
on 16 July 1990 for the reason 'account
closed' (Exhibits 2-A and 3-A).'
After a review of the Committee's findings, the Board
of Directors of the Bank resolved not to re-elect
complainant any longer to the position of assistant
president pursuant to the Bank's By-laws.
On July 19, 1991, complainant was informed of her
termination of employment from the Bank by Senior
Vice President Benedicto L. Santos, in a letter the text
of which is quoted in full:
'Dear Mrs. Reyes:

After a thorough investigation and


appreciation of the charges against you as
contained in the Memorandum of the
President dated March 8, 1991, the Fact
Finding Committee which was created to
investigate the commission and/or omission
of the acts alluded therein, has found the
following:
1. You have deliberately held the clearing of
Checks Nos. 11728 and 11730 of
Hongkong and Shanghai Banking
Corporation in the total amount of
US$224,650.00 by giving instructions to the
collection clerk not to send the checks for
collection. In view thereof, when the said
checks were finally sent to clearing after the
lapse of 15 months from receipt of said
checks, they were returned for the reason
'Account closed.' To date, the value of said
checks have not been paid by Filipinas
Tyrom, which as payee of the checks, had
been credited with their peso equivalent;
2. You tried to influence the decision of Atty.
Pablo P. Magno, Bank legal counsel, by
asking him to do something allegedly upon
instructions of a Senior Vice President of
the Bank or else lose his job when in truth
and in fact no such instructions was given;
and
3. You deliberately withheld from Mr.
Santos, Senior Vice President, the advice
given by the legal counsel of the Bank
which Mr. Santos had asked you to seek.
As a matter of fact, you even relayed a
false advice which delayed further the
sending of the two checks for collection.
Likewise, you refused to heed the advice of
the Bank's legal counsel to send the checks
for collection.
These findings have given rise to the
Bank's loss of trust and confidence in you,
the same being acts of serious misconduct
in the performance of your duties resulting
in monetary loss to the Bank. In view
thereof, the Board has resolved not to reelect you to the position of Assistant Vice
President of the Bank. Accordingly, your
services
are
terminated
effective
immediately. In relation thereto, your

Labor Relations Batch II Cases - 10


monetary and retirement benefits are
forfeited except those that have vested in
you.'
In her position paper, complainant alleged that the real
reason for her dismissal was her filing of the criminal
cases against the bank president, the vice president
and the auditors of the Bank, such filing not being a
valid ground for her dismissal. Furthermore, she
alleged that it would be self-serving for the respondent
to state that she was found guilty of gross misconduct
in deliberately withholding the clearing of the two dollar
checks. She further alleged that she was not afforded
due process as she was not given the chance to refute
the charges mentioned in the letter of dismissal.
Hence, she was illegally dismissed.

"IN SETTING ASIDE THE DECISION DATED 24


MARCH 1997 AND THE RESOLUTION DATED 28
JULY 1998 OF THE NLRC AND REINSTATING WITH
MODIFICATION THE DECISION DATED 20 JULY
1995 OF LABOR ARBITER CORNELIO L.
LINSANGAN, THE HONORABLE COURT OF
APPEALS SERIOUSLY ERRED, IN VIEW OF THE
FOLLOWING:
I.
IT IS THE SEC (NOW THE REGIONAL TRIAL
COURT) AND NOT THE NLRC WHICH HAS
ORIGINAL AND EXCLUSIVE JURISDICTION OVER
CASES INVOLVING THE REMOVAL FROM OFFICE
OF CORPORATE OFFICERS.

On the other hand, respondent argues that there were


substantial bases for the bank to lose its trust and
confidence on the complainant and, accordingly, had
just cause for terminating her services. Moreover, for
filing the clearly unfounded suit against the
respondent's officers, complainant is liable to pay
moral and exemplary damages and attorney's fees."7

II.

The Court of Appeals found that the NLRC committed grave


abuse of discretion in ruling that the dismissal of Reyes is valid. In
effect, the Court of Appeals reinstated the judgment of the labor
arbiter with modification as follows:

III.

"WHEREFORE, in the light of the foregoing, the


decision appealed from is hereby REVERSED and
SET ASIDE. In lieu thereof, judgment is hereby
rendered ordering respondent Bank as follows:
1. To pay petitioner full backwages and
other benefits from July 19, 1991 up to the
finality of this judgment;
2. To pay petitioner separation pay
equivalent to one (1) month salary for every
year of service in lieu of reinstatement; and
3. To pay attorney's fee equivalent to ten
(10%) percent of the total award.
SO ORDERED."8
Hence, the Bank's recourse to this Court contending in its
memorandum that:

EVEN ASSUMING ARGUENDO THAT THE NLRC


HAS JURISDICTION, THERE WAS SUBSTANTIAL
EVIDENCE OF RESPONDENT'S MISCONDUCT
JUSTIFYING THE BANK'S LOSS OF TRUST AND
CONFIDENCE ON (sic) HER.

EVEN ASSUMING ARGUENDO THAT RESPONDENT


WAS ENTITLED TO BACKWAGES, THE
HONORABLE COURT OF APPEALS ERRED IN
AWARDING UNLIMITED AND UNQUALIFIED
BACKWAGES THEREBY GOING FAR BEYOND THE
LABOR ARBITER'S DECISION LIMITING THE SAME
TO
THREE
YEARS,
WHICH
DECISION
RESPONDENT HERSELF SOUGHT TO EXECUTE."9
In sum, the resolution of this petition hinges on (1) whether the
NLRC has jurisdiction over the complaint for illegal dismissal; (2)
whether complainant Reyes was illegally dismissed; and (3)
whether the amount of back wages awarded was proper.
On the first issue, petitioner seeks refuge behind the argument
that the dispute is an intra-corporate controversy concerning as it
does the non-election of private respondent to the position of
Assistant Vice-President of the Bank which falls under the
exclusive and original, jurisdiction of the Securities and Exchange
Commission (now the Regional Trial Court) under Section 5 of
Presidential Decree No. 902-A. More specifically, petitioner
contends that complainant is a corporate officer, an elective
position under the corporate by-laws and her non-election is an
intra-corporate controversy cognizable by the SEC invoking
lengthily a number of this Court's decisions.10

Labor Relations Batch II Cases - 11


Petitioner Bank can no longer raise the issue of jurisdiction under
the principle of estoppel. The Bank participated in the
proceedings from start to finish. It filed its position paper with the
Labor Arbiter. When the decision of the Labor Arbiter was adverse
to it, the Bank appealed to the NLRC. When the NLRC decided in
its favor, the bank said nothing about jurisdiction. Even before the
Court of Appeals, it never questioned the proceedings on the
ground of lack of jurisdiction. It was only when the Court of
Appeals ruled in favor of private respondent did it raise the issue
of jurisdiction. The Bank actively participated in the proceedings
before the Labor Arbiter, the NLRC and the Court of Appeals.
While it is true that jurisdiction over the subject matter of a case
may be raised at any time of the proceedings, this rule
presupposes that laches or estoppel has not supervened. In this
regard, Baaga vs. Commission on the Settlement of Land
Problems,11 is most enlightening. The Court therein stated:
"This Court has time and again frowned upon the
undesirable practice of a party submitting his case for
decision and then accepting the judgment, only if
favorable, and attacking it for lack of jurisdiction when
adverse. Here, the principle of estoppel lies. Hence, a
party may be estopped or barred from raising the
question of jurisdiction for the first time in a petition
before the Supreme Court when it failed to do so in the
early stages of the proceedings."
Undeterred, the Bank also contends that estoppel cannot lie
considering that "from the beginning, petitioner Bank has
consistently asserted in all its pleadings at all stages of the
proceedings that respondent held the position of Assistant Vice
President, an elective position which she held by virtue of her
having been elected as such by the Board of Directors." As far as
the records before this Court reveal however, such an assertion
was made only in the appeal to the NLRC and raised again before
the Court of Appeals, not for purposes of questioning jurisdiction
but to establish that private respondent's tenure was subject to
the discretion of the Board of Directors and that her nonreelection was a mere expiration of her term. The Bank insists
that private respondent was elected Assistant Vice President
sometime in 1990 to serve as such for only one year. This
argument will not do either and must be rejected.
It appears that private respondent was appointed Accounting
Clerk by the Bank on July 14, 1963. From that position she rose
to become supervisor. Then in 1982, she was appointed Assistant
Vice-President which she occupied until her illegal dismissal on
July 19, 1991. The bank's contention that she merely holds an
elective position and that in effect she is not a regular employee is
belied by the nature of her work and her length of service with the
Bank. As earlier stated, she rose from the ranks and has been
employed with the Bank since 1963 until the termination of her
employment in 1991. As Assistant Vice President of the foreign
department of the Bank, she is tasked, among others, to collect

checks drawn against overseas banks payable in foreign currency


and to ensure the collection of foreign bills or checks purchased,
including the signing of transmittal letters covering the same. It
has been stated that "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.12 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." 13 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.14This being in truth a case of illegal dismissal, it is no
wonder then that the Bank endeavored to the very end to
establish loss of trust and confidence and serious misconduct on
the part of private respondent but, as will be discussed later, to no
avail.
This brings us to the second issue wherein the Bank insists that it
has presented substantial evidence to prove the breach of trust
on the part of private respondent warranting her dismissal. On this
point, the Court of Appeals disagreed and set aside the findings of
the NLRC that Reyes deliberately withheld the release of the two
dollar checks; that she is guilty of conflict of interest that she
waived her right to due process for not attending the hearing; and
that she was dismissed based on loss of trust and confidence. We
quote pertinent portions of the decision, to wit:
"FIRST: Respondent Bank heavily relied on the
testimony and affidavit of Remittance Clerk Joven' in
trying to establish loss of confidence. However,
Joven's allegation that petitioner instructed her to hold
the subject two dollar checks amounting to
$224,650.00 falls short of the requisite proof to warrant
petitioner's dismissal. Except for Joven's bare
assertion to withhold the dollar checks per petitioner's
instruction, respondent Bank failed to adduce
convincing evidence to prove bad faith and malice. It
bears emphasizing that respondent Bank's witnesses
merely corroborate Joven's testimony.
Upon this point, the rule that proof beyond reasonable
doubt is not required to terminate an employee on the
charge of loss of confidence and that it is sufficient that
there is some basis for such loss of confidence, is not
absolute. The right of an employer to dismiss
employees on the ground that it has lost its trust and
confidence in him must not be exercised arbitrarily and
without just cause. For loss of trust and confidence to
be valid ground for an employee's dismissal, it must be
substantial and not arbitrary, and must be founded on

Labor Relations Batch II Cases - 12


clearly established facts sufficient to warrant the
employee's separation from work (Labor vs. NLRC,
248 SCRA 183).
SECOND. Respondent Bank's charge of deliberate
withholding of the two dollar checks finds no support in
the testimony of Atty. Jocson, Chairman of the
Investigating Committee. On cross examination, Atty.
Jocson testified that the documents themselves do not
show any direct withholding (pp. 186-187, Rollo).
There being conflict in the statement of witnesses, the
court must adopt the testimony which it believes to be
true (U.S. vs. Losada, 18 Phil. 90).
THIRD. Settled is the rule that when the conclusions of
the Labor Arbiter are sufficiently substantiated by the
evidence on record, the same should be respected by
appellate tribunals since he is in a better position to
assess and evaluate the credibility of the contending
parties (Ala Mode Garments, Inc. vs. NLRC, 268
SCRA 497). In this regard, the Court quotes with
approval the following disquisition of Labor Arbiter
Linsangan, thus:
This Office has repeatedly gone over the
records of the case and painstakingly
examined the testimonies of respondent
bank's witnesses. One thing was clearly
established: that the legality of
complainant's dismissal based on the first
ground stated in respondent's letter of
termination (exh. 25-J, supra) will rise or fall
on the credibility of Miss Joven who
undisputedly is the star witness for the
bank. It will be observed that the
testimonies of the bank's other witnesses,
Analiza Castillo, Dante Castor and Antonio
Ragasa pertaining to the non-release of the
dollar checks and their corresponding
transmittal letters were all anchored on
what was told them by Ms. Joven, that is:
she was instructed by complainant to hold
the release of subject checks. In a nutshell,
therefore, the issue boils down to who
between complainant and Ms. Joven is
more credible.
After
painstakingly
examining
the
testimonies of Ms. Joven and respondent's
other witnesses' this Office finds the
evidence still wanting in proof of
complainant's guilt. This Office had closely
observed the demeanor of Ms. Joven while

testifying on the witness stand and was not


impressed by her assertions. The allegation
of Ms. Joven in that her non-release of the
dollar checks was upon the instruction of
complainant Reyes is extremely doubtful. In
the first place, the said instruction
constitutes a gross violation of the bank's
standard operating procedure. Moreover,
Ms. Joven was fully aware that the
instruction, if carried out, will greatly
prejudice her employer bank. It was
incumbent upon Ms. Joven not only to
disobey the instruction but even to report
the matter to management, if same was
really given to her by complainant.
Our doubt on the veracity of Ms. Joven's
allegation even deepens as we consider the
fact that when the non-release of the
checks was discovered by Ms. Castillo the
former contented herself by continuously
not taking any action on the two dollar
checks. Worse, Ms. Joven even impliedly
told by Ms. Castillo (sic) to ignore the two
checks and just withhold their release. In
her affidavit Ms. Castillo said:
'4. When I asked Cecille Joven
what I was supposed to do with
those checks, she said the same
should be held as per instruction
of Mrs. Reyes.' (Exh. "14",
supra).
The evidence shows that it was only on 16
May 1990 that Ms. Joven broke her silence
on the matter despite the fact that on 15
November 1989, at about 8:00 p.m. the
complainant, accompanied by driver
Celestino Banito, went to her residence and
confronted her regarding the non-release of
the dollar checks. It took Ms. Joven
eighteen (18) months before she explained
her side on the controversy. As to what
prompted her to make her letter of
explanation was not even mentioned.
On the other hand, the actions taken by the
complainant were spontaneous. When
complainant was informed by Mr. Castor
and Ms. Castillo regarding the non-release
of the checks sometime in November, 1989
she immediately reported the matter to Vice

Labor Relations Batch II Cases - 13


President Santos, Head of the Foreign
Department. And as earlier mentioned,
complainant went to the residence of Ms.
Joven to confront her. In this regard,
Celestino Bonito, complainant's driver,
stated in his affidavit, thus:
'1. Sometime on November 15,
1989 at about 7:00 o'clock in the
evening, Mrs. Clarita Tan Reyes
and I were in the residence of
one Ms. Cecille Joven, then a
Processing Clerk in the Foreign
Department of Prudential Bank;
2. Ms. Cecille Joven, her mother,
myself, and Mrs. Clarita Tan
Reyes were seated in the sala
when the latter asked the former,
Ms. Cecille Joven, how it came
about that the two dollar checks
which she was then holding with
the transmittal letters, were
found in a plastic envelope kept
day-to-day by the former;
3. Hesitatingly, Cecille Joven
said: "Eh, Mother (Mrs. Tan
Reyes had been intimately
called Mother in the Bank) akala
ko bouncing checks yon mga
yon.
4. Mrs. Clarita Tan Reyes, upon
hearing those words, was
surprised and she said: "Ano,
papaano mong alam na
bouncing na hindi mo pa
pinadadala:
5. Mrs. Cecille Joven turned pale
and was not able to answer.'
There are other factors that constrain this
Office to doubt even more the legality of
complainant's dismissal based on the first
ground stated in the letter of dismissal. The
non-release of the dollar checks was
reported to top management sometime on
15 November 1989 when complainant,
accompanied by Supervisor Dante Castor
and Analiza Castillo, reported the matter to
Vice President Santos. And yet, it was only

on 08 March 1991, after a lapse of sixteen


(16) months from the time the non-release
of the checks was reported to the Vice
President, that complainant was issued a
memorandum directing her to submit an
explanation. And it took the bank another
four (4) months before it dismissed
complainant.
The delayed action taken by respondent
against complainant lends credence to the
assertion of the latter that her dismissal was
a mere retaliation to the criminal complaints
she filed against the bank's top officials.
It clearly appears from the foregoing that
the complainant herein has no knowledge
of, much less participation in, the nonrelease of the dollar checks under
discussion. Ms. Joven is solely responsible
for the same. Incidentally, she was not even
reprimanded by the bank.
FOURTH. Respondent Bank having failed to furnish
petitioner necessary documents imputing loss of
confidence, petitioner was not amply afforded
opportunity to prepare an intelligent answer. The Court
finds nothing confidential in the auditor's report and the
affidavit of Transmittal Clerk Joven. Due process
dictates that management accord the employees every
kind of assistance to enable him to prepare adequately
for his defense, including legal representation.
The issue of conflict of interest not having been
covered by the investigation, the Court finds it
irrelevant to the charge."15
We uphold the findings of the Court of Appeals that the dismissal
of private respondent on the ground of loss of trust and
confidence was without basis. The charge was predicated on the
testimony of Ms. Joven and we defer to the findings of the Labor
Arbiter as confirmed and adopted by the Court of Appeals on the
credibility of said witness. This Court is not a trier of facts and will
not weigh anew the evidence already passed upon by the Court
of Appeals.16
On the third issue, the Bank questions the award of full
backwages and other benefits from July 19, 1991 up to the finality
of this judgment; separation pay equivalent to one (1) month
salary for every year of service in lieu of reinstatement; and
attorney's fees equivalent to ten (10%) percent of the total award.
The Bank argues, in the main, that private respondent is not
entitled to full backwages in view of the fact that she did not

Labor Relations Batch II Cases - 14


bother to appeal that portion of the labor arbiter's judgment
awarding back wages limited to three years. It must be stressed
that private respondent filed a special civil action for certiorari to
review the decision of the NLRC 17 and not an ordinary appeal. An
ordinary appeal is distinguished from the remedy of certiorari
under Rule 65 of the Revised Rules of Court in that in ordinary
appeals it is settled that a party who did not appeal cannot seek
affirmative relief other than the ones granted in the decision of the
court below.18 On the other hand, resort to a judicial review of the
decisions of the National Labor Relations Commission in a
petition for certiorari under Rule 65 of Rules of Court is confined
to issues of want or excess of jurisdiction and grave abuse of
discretion.19 In the instant case, the Court of Appeals found that
the NLRC gravely abused its discretion in finding that the private
respondent's dismissal was valid and so reversed the same.
Corollary to the foregoing, the appellate court awarded
backwages in accordance with current jurisprudence.
Indeed, jurisprudence is clear on the amount of backwages
recoverable in cases of illegal dismissal. Employees illegally
dismissed prior to the effectivity of Republic Act No. 6715 on
March 21, 1989 are entitled to backwages up to three (3) years
without deduction or qualification, while those illegally dismissed
after are granted full backwages inclusive of allowances and other
benefits or their monetary equivalent from the time their actual
compensation was withheld from them up to the time of their
actual reinstatement.20 Considering that private respondent was
terminated on July 19, 1991, she is entitled to full backwages from
the time her actual compensation was withheld from her (which,
as a rule, is from the time of her illegal dismissal) up to the finality
of this judgment (instead of reinstatement) considering that
reinstatement is no longer feasible as correctly pointed out by the
Court of Appeals on account of the strained relations brought
about by the litigation in this case. Since reinstatement is no
longer viable, she is also entitled to separation pay equivalent to
one (1) month salary for every year of service. 21 Lastly, since
private respondent was compelled to file an action for illegal
dismissal with the labor arbiter, she is likewise entitled to
attorney's fees22 at the rate above-mentioned. There is no room to
argue, as the Bank does here, that its liability should be mitigated
on account of its good faith and that private respondent is not
entirely blameless. There is no showing that private respondent is
partly at fault or that the Bank acted in good faith in terminating an
employee of twenty-eight years. In any event, Article 279 of
Republic Act No. 671523 clearly and plainly provides for "full
backwages" to illegally dismissed employees.1wphi1.nt
WHEREFORE, the instant petition for review on certiorari
is DENIED, and the assailed Decision of the Court of Appeals,
dated October 15, 1999, is AFFIRMED.
SO ORDERED.

Melo, Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur.


SECOND DIVISION
[G.R. No. 121143. January 21, 1997]
PURIFICACION G. TABANG, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and PAMANA GOLDEN
CARE
MEDICAL
CENTER
FOUNDATION,
INC., respondents.
DECISION
REGALADO, J.:
This is a petition for certiorari which seeks to annul the
resolution of the National Labor Relations Commission (NLRC),
dated June 26, 1995, affirming in toto the order of the labor
arbiter, dated April 26, 1994, which dismissed petitioners
complaint for illegal dismissal with money claims for lack of
jurisdiction.
The records show that petitioner Purificacion Tabang was a
founding member, a member of the Board of Trustees, and the
corporate secretary of private respondent Pamana Golden Care
Medical Center Foundation, Inc., a non-stock corporation
engaged in extending medical and surgical services.
On October 30, 1990, the Board of Trustees issued a
memorandum appointing petitioner as Medical Director and
Hospital Administrator of private respondents Pamana Golden
Care Medical Center in Calamba, Laguna.
Although the memorandum was silent as to the amount of
remuneration for the position, petitioner claims that she received a
monthly retainer fee of five thousand pesos (P5,000.00) from
private respondent, but the payment thereof was allegedly
stopped in November, 1991.
As medical director and hospital administrator, petitioner
was tasked to run the affairs of the aforesaid medical center and
perform all acts of administration relative to its daily operations.
On May 1, 1993, petitioner was allegedly informed
personally by Dr. Ernesto Naval that in a special meeting held on
April 30, 1993, the Board of Trustees passed a resolution relieving
her of her position as Medical Director and Hospital Administrator,
and appointing the latter and Dr. Benjamin Donasco as acting
Medical Director and acting Hospital Administrator,
respectively. Petitioner averred that she thereafter received a
copy of said board resolution.

Labor Relations Batch II Cases - 15


On June 6, 1993, petitioner filed a complaint for illegal
dismissal and non-payment of wages, allowances and 13th month
pay before the labor arbiter.

(t)o appoint a Medical Director, Comptroller/Administrator, Chiefs


of Services and such other officers as it may deem necessary and
prescribe their powers and duties. [4]

Respondent corporation moved for the dismissal of the


complaint on the ground of lack of jurisdiction over the subject
matter. It argued that petitioners position as Medical Director and
Hospital Administrator was interlinked with her position as
member of the Board of Trustees, hence, her dismissal is an intracorporate controversy which falls within the exclusive jurisdiction
of the Securities and Exchange Commission (SEC).

The president, vice-president, secretary and treasurer are


commonly regarded as the principal or executive officers of a
corporation, and modern corporation statutes usually designate
them as the officers of the corporation.[5] However, other offices
are sometimes created by the charter or by-laws of a corporation,
or the board of directors may be empowered under the by-laws of
a corporation to create additional offices as may be necessary.[6]

Petitioner opposed the motion to dismiss, contending that


her position as Medical Director and Hospital Administrator was
separate and distinct from her position as member of the Board of
Trustees. She claimed that there is no intra-corporate
controversy involved since she filed the complaint in her capacity
as Medical Director and Hospital Administrator, or as an employee
of private respondent.

It has been held that an office is created by the charter of


the corporation and the officer is elected by the directors or
stockholders.[7] On the other hand, an employee usually
occupies no office and generally is employed not by action of the
directors or stockholders but by the managing officer of the
corporation who also determines the compensation to be paid to
such employee.[8]

On April 26, 1994, the labor arbiter issued an order


dismissing the complaint for lack of jurisdiction. He ruled that the
case falls within the jurisdiction of the SEC, pursuant to Section 5
of Presidential Decree No. 902-A. [1]

In the case at bar, considering that herein petitioner, unlike


an ordinary employee, was appointed by respondent corporations
Board of Trustees in its memorandum of October 30, 1990, [9] she
is deemed an officer of the corporation. Perforce, Section 5(c) of
Presidential Decree No. 902-A, which provides that the SEC
exercises exclusive jurisdiction over controversies in the election
or appointment of directors, trustees, officers or managers of
corporations, partnerships or associations, applies in the present
dispute. Accordingly, jurisdiction over the same is vested in the
SEC, and not in the Labor Arbiter or the NLRC.

Petitioners motion for reconsideration was treated as an


appeal by the labor arbiter who consequently ordered the
elevation of the entire records of the case to public respondent
NLRC for appellate review. [2]
On appeal, respondent NLRC affirmed the dismissal of the
case on the additional ground that the position of a Medical
Director and Hospital Administrator is akin to that of an executive
position in a corporate ladder structure, hence, petitioners
removal from the said position was an intra-corporate controversy
within the original and exclusive jurisdiction of the SEC. [3]
Aggrieved by the decision, petitioner filed the instant
petition which we find, however, to be without merit.
We agree with the findings of the NLRC that it is the SEC
which has jurisdiction over the case at bar. The charges against
herein private respondent partake of the nature of an intracorporate controversy. Similarly, the determination of the rights of
petitioner and the concomitant liability of private respondent
arising from her ouster as a medical director and/or hospital
administrator, which are corporate offices, is an intra-corporate
controversy subject to the jurisdiction of the SEC.
Contrary to the contention of petitioner, a medical director
and a hospital administrator are considered as corporate officers
under the by-laws of respondent corporation. Section 2(i), Article
I thereof states that one of the powers of the Board of Trustees is

Moreover, the allegation of petitioner that her being a


member of the Board of Trustees was not one of the
considerations for her appointment is belied by the tenor of the
memorandum itself. It states: We hope that you will uphold and
promote the mission of our foundation,[10] and this cannot be
construed other than in reference to her position or capacity as a
corporate trustee.
A corporate officers dismissal is always a corporate act, or
an intra-corporate controversy, and the nature is not altered by
the reason or wisdom with which the Board of Directors may have
in taking such action.[11] Also, an intra-corporate controversy is
one which arises between a stockholder and the
corporation. There is no distinction, qualification, nor any
exemption whatsoever. The provision is broad and covers all
kinds of controversies between stockholders and corporations. [12]
With regard to the amount of P5,000.00 formerly received
by herein petitioner every month, the same cannot be considered
as compensation for her services rendered as Medical Director
and Hospital Administrator. The vouchers[13] submitted by
petitioner show that the said amount was paid to her by PAMANA,

Labor Relations Batch II Cases - 16


Inc., a stock corporation which is separate and distinct from
herein private respondent. Although the payments were
considered advances to Pamana Golden Care, Calamba branch,
there is no evidence to show that the Pamana Golden Care stated
in the vouchers refers to herein respondent Pamana Golden Care
Medical Center Foundation, Inc.
Pamana Golden Care is a division of Pamana, Inc., while
respondent Pamana Golden Care Medical Center Foundation,
Inc. is a non-stock, non-profit corporation. It is stated in the
memorandum of petitioner that Pamana, Inc. is a stock and profit
corporation selling pre-need plan for education, pension and
health care. The health care plan is called Pamana Golden Care
Plan and the holders are called Pamana Golden Care Card
Holders or, simply, Pamana Members. [14]
It is an admitted fact that herein petitioner is a retained
physician of Pamana, Inc., whose patients are holders of the
Pamana Golden Care Card. In fact, in her complaint[15] filed
before the Regional Trial Court of Calamba, herein petitioner is
asking, among others, for professional fees and/or retainer fees
earned for her treatment of Pamana Golden Care card holders.
[16]
Thus, at most, said vouchers can only be considered as proof
of payment of retainer fees made by Pamana, Inc. to herein
petitioner as a retained physician of Pamana Golden Care.
Moreover, even assuming that the monthly payment
of P5,000.00 was a valid claim against respondent corporation,
this would not operate to effectively remove this case from the
jurisdiction of the SEC. In the case of Cagayan de Oro Coliseum,
Inc. vs. Office of the Minister of Labor and Employment, etc., et
al.,[17] we ruled that (a)lthough the reliefs sought by Chavez
appear to fall under the jurisdiction of the labor arbiter as they are
claims for unpaid salaries and other remunerations for services
rendered, a close scrutiny thereof shows that said claims are
actually part of the perquisites of his position in, and therefore
interlinked with, his relations with the corporation. In Dy, et
al., vs. NLRC, et al., the Court said: (t)he question of
remuneration involving as it does, a person who is not a mere
employee but a stockholder and officer, an integral part, it might
be said, of the corporation, is not a simple labor problem but a
matter that comes within the area of corporate affairs and
management and is in fact a corporate controversy in
contemplation of the Corporation Code.
WHEREFORE, the questioned resolution of the NLRC is
hereby AFFIRMED, without prejudice to petitioners taking
recourse to and seeking relief through the appropriate remedy in
the proper forum.
SO ORDERED.
Romero, Puno, Mendoza, and Torres, Jr., JJ., concur.

SECOND DIVISION
[G.R. No. 125931. September 16, 1999]
UNION MOTORS CORPORATION, BENITO S. CUA, and
CHARLOTTE C. CUA, petitioners, vs. THE
NATIONAL LABOR RELATIONS COMMISSION and
PRISCILLA D. GO, respondents.
DECISION
QUISUMBING, J.:
This petition for certiorari and prohibition, under Rule 65 of
the Rules of Court, seeks to set aside the decision dated March
29, 1996, of the National Labor Relations Commission in NLRC
NCR CA No. 008119-95. It also assails the NLRC resolution,
dated May 28, 1996, denying petitioners motion for
reconsideration. Petitioners also pray that NLRC desist from
further proceedings in said case.
Petitioner Benito S. Cua is the father of Charlotte C.
Cua. They are, respectively, the President and VicePresident/Treasurer of petitioner UMC. Hereafter, they will be
referred to respectively as Mr. Cua and Ms. Cua. Private
respondent Priscilla Go was, originally, the complainant in a case
for illegal dismissal filed against petitioners. Hereafter, she will be
referred to as Ms. Go.
The facts of the case, as culled from the records, are as
follows:
On June 17, 1981, UMC hired Ms. Go as its Administrative
and Personnel Manager. On February 13, 1982, she was
appointed Treasurer while concurrently serving as Administrative
and Personnel Manager.
Seven years later, UMCs Board of Directors effected a toplevel corporate revamp. Ms. Cua was appointed VicePresident/Treasurer. Ms. Go was in turn appointed Assistant to
the President and Administrative and Personnel Manager by the
Board.[1] Ms. Go accepted the appointment on the condition that
she would report solely and directly to the UMC President, Mr.
Cua.
On November 2, 1989, however, Mr. Cua issued an interoffice memorandum advising Ms. Go that she would be under the
direct supervision of Ms. Cua, the Vice-President/Treasurer.[2]
On July 15, 1991, UMC Service Manager Reymundo M.
Varilla requested Ms. Go for the assignment of one Analyn Aldea
to his department for the duration of her contractual

Labor Relations Batch II Cases - 17


employment. Ms. Go denied the request. The denial was based
on the lack of an official written advice from Ms. Cua.[3]
On July 18, 1991, Ms. Cua issued a memorandumreminder stating that Ms. Cua was Ms. Gos immediate
superior. The memorandum went on to say that [any] verbal,
written, taped or any other form of communication advicewill
constitute official advice[4] Ms. Cua further said that Ms. Go had
been given verbal advice regarding Aldeas transfer of
assignment.
That memorandum prompted Ms. Go to write Mr. Cua
regarding her intention to withdraw given the escalating level of
tension between her and Ms. Cua.[5]
On July 19, 1991, Ms. Go stopped reporting for work. She
claimed she had gone on leave to avoid further clashes between
her and Ms. Cua.
On August 7, 1991, Mr. Cua designated one Nancy T.
Borras as Administrative and Personnel Consultant in the
absence of Ms. Go. Meanwhile, Ms. Go met with Mr. Cua and
UMC Chairman Gilbert Dee, Sr. She was advised to extend her
leave until her differences with Ms. Cua could be resolved.
On September 30, 1991, Ms. Go wrote Mr. Cua requesting
him to come up with a concrete plan to implement his
commitment to draw up a workable arrangement between her and
Charlotte Cua.
On November 6, 1991, however, Mr. Cua wrote private
respondent a letter advising her that he was accepting her
resignation.[6]
Insisting that she did not resign and hence, an acceptance
of her resignation could not be possible, Ms. Go then filed a
complaint for constructive/illegal dismissal with the Labor
Arbiter. Her case was docketed as NLRC-NCR Case No. 00-0106745-91. She prayed for reinstatement and payment of
backwages, 13th month pay, allowances, and bonuses. She also
sought moral damages in the amount of P3 million, exemplary
damages of no less than P500,000.00, and attorneys fees
equivalent to 10% of the total monetary claims to be awarded her.
In their reply dated February 24, 1992, petitioners denied
that Ms. Go was illegally dismissed. They countered that she had
abandoned her job after she had expressed her intention to resign
on July 18, 1991. This intent was concretized when she stopped
reporting for work the following day.

On November 21, 1994, the Labor Arbiter rendered his


decision dismissing the private respondents complaint. The
dispositive portion of the decision reads:
IN THE LIGHT OF THE FOREGOING CONSIDERATIONS, the
separation of the complainant from her service, for whatever
cause, must be upheld. The strained relation existing between
the parties does not favor the continuous stay of the complainant
in the respondent corporation. Be that as it may, the respondents
are ordered to extend to the complainant, monetary
considerations, equivalent to her one month salary for every year
of service rendered. The respondents are, likewise, assessed
10% of the financial considerations awarded as attorneys
fees. The rest of the complaints are dismissed for lack of merit.
SO ORDERED.[7]
Dissatisfied, Ms. Go seasonably appealed the Labor
Arbiters decision to the NLRC. Her appeal was docketed as
NLRC NCR CA No. 008119-95. In her Memorandum of Appeal,
she charged the Labor Arbiter with grave error in: (1) failing to
hold that she was constructively/illegally dismissed; and (2) failing
to appreciate the evidence on record.[8]
In their Reply/Opposition, petitioners initially argued that
she was not dismissed, but had voluntarily resigned and
abandoned her employment.[9] However, in their Supplemental
Reply, petitioners switched tracks. They now contended that she
was a corporate officer who had been elected/appointed to the
position of Assistant to the President/Administrative and
Personnel Manager by the UMC Board of Directors. Any issue
relating to her removal from the said posts was therefore an intracorporate dispute.[10] As such, jurisdiction over the action did not
lie with the NLRC but rather with the Securities and Exchange
Commission (SEC), pursuant to Section 5 of Presidential Decree
No. 902-A which provides:
SECTION 5. In addition to the regulatory and adjudicative
functions of the Securities and Exchange Commission over
corporations, partnerships and other forms of associations
registered with it as expressly granted under existing laws and
decrees, it shall have original and exclusive jurisdiction to hear
and decide cases involving:
xxx
[c] Controversies in the election or appointments of directors,
trustees, officers, or managers of such corporations, partnerships,
or associations.
Petitioners reinforced their arguments by pointing to this
Courts ruling in Espino v. NLRC.[11] We held in Espino that a
corporate officers dismissal is always a corporate act and/or

Labor Relations Batch II Cases - 18


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.[12]
Petitioners then prayed for the dismissal of the case before
the NLRC.
On March 29, 1996, the Second Division of the NLRC
promulgated its decision in NCR CA No. 008119-95, reversing
and setting aside the decision of the Labor Arbiter. The decretal
portion of the said decision states:
WHEREFORE, premises considered, the November 21, 1995
Decision of Labor Arbiter Manuel F. Asuncion is hereby, Reversed
and Set Aside and a new one entered finding that complainantappellant was illegally dismissed. In lieu of reinstatement,
respondent Union Motors Corporation is hereby ordered to pay
complainant separation pay equivalent to one (1) month pay for
every year of service and to pay full backwages computed from
date of dismissal (June 19, 1991) up to promulgation of this
resolution plus ten percent (10%) of all amounts awarded by way
of attorneys fees.
SO ORDERED.[13]
Petitioners duly filed a motion for reconsideration. Said
motion was denied by the NLRC in its resolution dated May 28,
1996.
Unhappy with this turn of events, petitioners filed the
instant petition for certiorari and/or prohibition, raising the
following issues:
1. Whether or not the public respondent NLRC has
jurisdiction over the instant complaint for an
alleged illegal dismissal from a corporate office;
2. Whether or not the public respondent NLRC
acted with grave abuse of discretion in refusing
to dismiss the instant case based on lack of
jurisdiction over the subject matter, and instead
ordering the petitioners to pay separation pay
plus backwages to the private respondent;
3. Whether or not the public respondent NLRC
should cease and desist from further proceeding
with the instant case.[14]
The issues shall be jointly discussed because they are
inter-related.

In the present case, we once again face the tug-of-war


between the jurisdiction of the NLRC and the SEC. It is the
private respondents stand that she is but mere employee of the
petitioner corporation. A high-ranking employee, but an employee
nonetheless, who was illegally dismissed. Hence, no grave
abuse of discretion was committed by the NLRC when it assumed
jurisdiction over her case. Petitioners, however, vehemently insist
that she was a corporate officer who had been ousted from
office. Thus, private respondents dismissal squarely falls within
the jurisdiction of the SEC as an intra-corporate dispute. A proper
resolution of this case thus entails determining whether the
private respondent is a mere employee (albeit high in rank) or a
corporate officer. To determine which body has jurisdiction over
this case requires considering not only the relationship of the
parties, but also the nature of the question that is the subject of
their controversy.[15]
Section 25 of the Corporation Code provides in part:
Immediately after their election, the directors of a corporation
must formally organize by the election of a president, who shall be
a director, a treasurer who may or may not be a director, a
secretary who shall be a resident and citizen of the Philippines,
and such other officers as may be provided for in the by laws x x
x
Thus, there are specifically three officers which a
corporation must have under the statute: president, secretary, and
treasurer. However, the law does not limit corporate officers to
these three. Section 25 gives corporations the widest latitude to
provide for such other offices, as they may deem necessary. The
by-laws may and usually do provide for such other officers, e.g.,
vice-president, cashier, auditor, and general manager. The bylaws of petitioner corporation are no exception. Article V (1)
thereof states that one of the powers vested in the Board of
Directors is to appoint such other officers as they may deem
necessary who shall have such power and shall perform such
duties as may from time to time be prescribed by the Board.[16]
The records clearly show that private respondents position
as Assistant to the President and Personnel & Administrative
Manager is a corporate office under the by-laws of UMC. The
Secretarys Certificate of February 3, 1989, lists the position of
Assistant to the President and Personnel & Administrative
Manager as a corporate office.[17] We have held that one who is
included in the by-laws of an association in its roster of corporate
officers is an officer of said corporation and not a mere employee.
[18]
It is also settled that if found regular on its face, a Secretarys
Certification is sufficient to rely on, and there is no need to
investigate the truth of the facts contained in such certification.
[19]
No reason has been shown here to doubt the veracity of the
said corporate secretarys certification. Hence, the inescapable

Labor Relations Batch II Cases - 19


conclusion is that private respondent was an officer of petitioner
UMC.
Section 23 of the Corporation Code provides in part:
Unless otherwise provided in this Code, the corporate powers of
all corporations formed under this Code shall be exercised, all
business conducted, and all property of such corporations
controlled and held by the board of directors or trustees x x x
Under Section 23 of the Corporation Code, directors are
thus charged with the control and management of their
corporation. It is settled that they may appoint officers and agents
and as incident to this power of appointment, they may discharge
those appointed.[20]
From all the foregoing, it becomes clear that the charges
filed by Ms. Go against petitioners partake of the nature of an
intra-corporate dispute. Similarly, the determination of the rights
of Ms. Go and the concomitant liability of the petitioners arising
from her ouster as a corporate officer, is an intra-corporate
controversy. For the SEC to take cognizance of a case, the
controversy must pertain to any of the following relationships: (a)
between the corporation, partnership or association and the
public; (b) between the corporation, partnership or association
and its stockholders, partners, members, or officers(italics for
emphasis); (c) between the corporation, partnership, or
association and the state so far as its franchise, permit, or license
to operate is concerned; and (d) among the stockholders,
partners, or associates themselves.[21] The instant case, in our
view, is a dispute between a corporation and one of its
officers. As such, Ms. Gos complaint is subject to the jurisdiction
of the SEC, and not the NLRC. Interpreting Section 5 of
Presidential Decree No. 902-A, we have consistently ruled that it
is the SEC that has exclusive and original jurisdiction over
controversies involving removal from a corporate office.[22]

Private respondent now faults petitioners for failing to raise


the issue of lack of jurisdiction by the NLRC at the earliest
possible time. She contends that since the petitioners actively
participated in the proceedings before the Labor Arbiter and the
NLRC, they are now estopped from assailing the jurisdiction of
the NLRC. Private respondents reliance on the principle of
estoppel to justify the exercise of jurisdiction by the NLRC over
her case is misplaced.
The long-established rule is that jurisdiction over a subject
matter is conferred by law.[23] Estoppel does not apply to confer
jurisdiction to a tribunal that has none over a cause of action.
[24]
Where it appears that the court or tribunal has no jurisdiction,
then the defense may be interposed at any time, even on
appeal[25] or even after final judgment.[26] Moreover, the principle of
estoppel cannot be invoked to prevent this court from taking up
the question of jurisdiction.[27]
To conclude, we find that the NLRC erred in assuming
jurisdiction over, and thereafter in failing to dismiss, the private
respondents complaint for illegal dismissal against petitioners,
because the NLRC is without jurisdiction on the subject matter of
the controversy.
WHEREFORE, the instant petition for certiorari and/or
prohibition is hereby GRANTED. The decision of the National
Labor Relations Commission dated March 29, 1996 and the
resolution of May 28, 1996 denying petitioners motion for
reconsideration are hereby REVERSED and SET ASIDE for
having been rendered without jurisdiction. This ruling is without
prejudice to the private respondents seeking relief, if so minded,
in the proper forum. No pronouncement as to costs.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, and Buena, JJ., concur.