For Tuesday please..

Please read until Art. 224 ( Page 71 of your book)

I. NLRC
- nature and organization
- composition
- qualification and appointment of chairman and commissioner
- salaries and emoluments

II. Jurisdiction of Labor Arbiters and NLRC

a. Labor Dispute not subject to Barangay Conciliation

Case: Montaya vs Escaya GR No. 82211-12

b. Venue of Action
Cases: PNB vs Cabansag GR No. 157010
Dayag et al vs Canizarez GR No. 124193, March 6, 1998
Sulpicio Lines Inc vs NLRC 254 SCRA 506
Philtranco Service Enterprise Inc vs NLRC and Nieva GR No.
124100

c. Jurisdiction over ULP Cases

Cases: National Union of Bank Employee vs Lazaro et al, GR No. 56431
Manila Mandana Employees Union vs NLRC, GR No. 76989
Delta Ventures vs Cabato, 327 SCRA 521

d. Jurisdiction over termination cases

Cases: Altas vs NLRC Nov. 18, 2002
Perpetual Help vs Faburada Oct 8, 2001
Austria vs NLRC GR No. 124382
DFA and ADB vs NLRC, Sept 18, 1996

i. Termination of Corporate Officers

Cases: Dy et al vs NLRC GR No. 68544
Mainland vs Movilla GR No. 118088
Tabang vs NLRC GR No. 121143
Matling Industrial and Commercial Corp vs RR Coros, GR No.
157802
Cosare vs Broadcom Feb 5, 2014
(Please compare and contrast the ruling in the above cases)

ii. Jurisdiction over Privitazed Govt Corp

Cases: Ang vs PNB GR No. 178762

e. Jurisdiction over Money Claims

Cases: San Jose vs NLRC and Ocean Terminal Services, GR No. 121227
Grand Asian Shipping Inc vs Galvez et al, GR No. 178184
San Miguel Corp vs NLRC GR No. 80774
(Compare the Ruling in Grand Asian and San Miguel Corp cases.)

f. Jurisdiction over OFW’s Money Claim

Cases: PNB vs Cabansag GR No. 157010

g. Jurisdiction over wage distortion

G.R. No. 82211-12 March 21, 1989

TERESITA MONTOYA, petitioner,

vs.
TERESITA ESCAYO, JOY ESCAYO, AIDA GANANCIAL, MARY ANN CAPE,
CECILIA CORREJADO, ERLINDA PAYPON and ROSALIE VERDE, AND
NATIONAL LABOR RELATIONS COMMISSION, respondents.

 This petition raises a singular issue, i.e., the applicability of Presidential

Decree (P.D.) No. 1508, more commonly known as the Katarungang
Pambarangay Law, to labor disputes.

FACTS: The private respondents were all formerly employed as salesgirls in the
petitioner's store, the "Terry's Dry Goods Store," in Bacolod City. On different
dates, they separately filed complaints for the collection of sums of money
against the petitioner for alleged unpaid overtime pay, holiday pay, 13th month
pay, ECOLA, and service leave pay: for violation of the minimum wage law, illegal
dismissal, and attorney's fees. The complaints, which were originally treated as
separate cases, were subsequently consolidated on account of the similarity in
their nature. On August 1, 1984, the petitioner-employer moved (Annex "C" of
Petition) for the dismissal of the complaints, claiming that among others, the
private respondents failed to refer the dispute to the Lupong Tagapayapa for
possible settlement and to secure the certification required from the Lupon
Chairman prior to the filing of the cases with the Labor Arbiter. These actions
were allegedly violative of the provisions of P.D. No. 1508, which apply to the
parties who are all residents of Bacolod City.

 Labor Arbiter ordered the dismissal of the complaints.

 The private respondents sought the reversal of the Labor Arbiter's order
before the respondent NLRC.
 NLRC rendered the assailed resolution reversing the order of Ovejera,
and remanded the case to the Labor Arbiter for further proceedings

 It is the petitioner's contention that the provisions of the Katarungang

Pambarangay Law (P.D. No. 1508) relative to the prior amicable settlement
proceedings before the Lupong Tagapayapa as a jurisdictional requirement
at the trial level apply to labor cases.

 More particularly, the petitioner insists that the failure of the private
respondents to first submit their complaints for possible conciliation and
amicable settlement in the proper barangay court in Bacolod City and to
secure a certification from the Lupon Chairman prior to their filing with
the Labor Arbiter, divests the Labor Arbiter, as well as the respondent
Commission itself, of jurisdiction over these labor controversies and
renders their judgments thereon null and void.

 On the other hand, the Solicitor General, as counsel for the public
respondent NLRC, in his comment, strongly argues and convincingly
against the applicability of P.D. No. 1508 to labor cases.

HELD:
 We dismiss the petition for lack of merit, there being no satisfactory
showing of any grave abuse of discretion committed by the public
respondent.
 The provisions of P.D. No. 1508 requiring the submission of disputes
before the barangay Lupong Tagapayapa prior to their filing with the court
or other government offices are not applicable to labor cases.
 As correctly pointed out by the Solicitor General in his comment to the
petition, even from the three "WHEREAS" clauses of P.D. No. 1508 can be
gleaned clearly the decree's intended applicability only to courts of
justice, and not to labor relations commissions or labor arbitrators'
offices. The express reference to "judicial resources", to "courts of justice",
"court dockets", or simply to "courts" are significant. On the other band,
there is no mention at all of labor relations or controversies and labor
arbiters or commissions in the clauses involved.
 In addition, Letter of Instructions No. 956 and Letter of Implementation
No. 105, both issued on November 12, 1979 by the former President in
connection with the implementation of the Katarungang Pambarangay
Law, affirm this conclusion. These Letters were addressed only to the
following officials: all judges of the Courts of first Instance, Circuit Criminal
Courts, Juvenile and Domestic Relations Courts, Courts of Agrarian
Relations, City Courts and Municipal Courts, and all Fiscals and other
Prosecuting Officers. Expressio unius est exclusio alterius.

 But, the opinion of the Honorable Minister of Justice (Opinion No. 59, s.
1983) to the contrary notwithstanding, all doubts on this score are
dispelled by The Labor Code Of The Philippines (Presidential Decree No.
442, as amended) itself. Article 226 thereof grants original and
exclusive jurisdiction over the conciliation and mediation of
disputes, grievances, or problems in the regional offices of the
Department of Labor and Employ- ment. It is the said Bureau and its
divisions, and not the barangay Lupong Tagapayapa, which are vested
by law with original and exclusive authority to conduct conciliation
and mediation proceedings on labor controversies before their
endorsement to the appropriate Labor Arbiter for adjudication.

 Requiring conciliation of labor disputes before the barangay courts would

defeat the very salutary purposes of the law. Instead of simplifying labor
proceedings designed at expeditious settlement or referral to the proper
court or office to decide it finally, the position taken by the petitioner would
only duplicate the conciliation proceedings and unduly delay the
disposition of the labor case
G.R. No. 157010 June 21, 2005

PHILIPPINE NATIONAL BANK, petitioner,

vs.
FLORENCE O. CABANSAG, respondent.

FACTS:

Florence Cabansag went to Singapore as a tourist. While she was there, she
looked for a job and eventually applied with the Singapore Branch of the
Philippine National Bank. PNB is a private banking corporation organized and
existing under Philippine laws. She was eventually employed and was issued an
employment pass. In her job offer, it was stated, among others, that she was to
be put on probation for 3 months and termination of her employment may be
made by either party after 1 day notice while on probation, and 1 month notice
or 1 month pay in lieu of notice upon confirmation. She accepted the terms and
was issued an OEC by the POEA. She was commended for her good work.
However, she was informed by Ruben Tobias, the bank president, that she would
have to resign in line with some cost cutting and realignment measures of the
company. She refused but was informed by Tobias that if she does not resign,
he will terminate her instead.

 Labor Arbiter rendered judgment in favor of the Complainant and against

the Respondents, ruling that respondet was guilty of illegal dismissal
 PNB appealed the labor arbiter’s Decision to the NLRC. In a Resolution
dated June 29, 2001, the Commission affirmed that Decision
 Ruling of the Court of Appeals
o The appellate court found that the Contract had actually been
processed by the Philippine Embassy in Singapore and approved by
the Philippine Overseas Employment Administration (POEA), which
then used that Contract as a basis for issuing an Overseas
Employment Certificate in favor of respondent.
o According to the CA, even though respondent secured an
employment pass from the Singapore Ministry of Employment, she
did not thereby waive Philippine labor laws, or the jurisdiction of the
labor arbiter or the NLRC over her Complaint for illegal dismissal.
o Finally, the CA held that petitioner had failed to establish a just
cause for the dismissal of respondent. The bank had also failed to
give her sufficient notice and an opportunity to be heard and to
defend herself. The CA ruled that she was consequently entitled to
reinstatement and back wages, computed from the time of her
dismissal up to the time of her reinstatement.

Issues

Petitioner submits the following issues for our consideration:

"1. Whether or not the arbitration branch of the NLRC in the National
Capital Region has jurisdiction over the instant controversy;

"2. Whether or not the arbitration of the NLRC in the National Capital
Region is the most convenient venue or forum to hear and decide the
instant controversy; and

HELD: The Court’s Ruling

The Petition has no merit.

First Issue:

Jurisdiction

The jurisdiction of labor arbiters and the NLRC is specified in Article 217 of the
Labor Code.

More specifically, Section 10 of RA 8042 reads in part:

“SECTION 10. Money Claims. — Notwithstanding any provision of law to the

contrary, the Labor Arbiters of the National Labor Relations Commission
(NLRC) shall have the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after the filing of the complaint, the claims
arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages.

X x x x x x x x x”

Based on the foregoing provisions, labor arbiters clearly have original and
exclusive jurisdiction over claims arising from employer-employee
relations, including termination disputes involving all workers, among
whom are overseas Filipino workers (OFW).15

 Cabansag was an OFW. She directly hired, while on a tourist status in

Singapore, by the PNB branch in that city state. Prior to employing
respondent, petitioner had to obtain an employment pass for her from the
Singapore Ministry of Manpower. Securing the pass was a regulatory
requirement pursuant to the immigration regulations of that country.
 Similarly, the Philippine government requires non-Filipinos working in the
country to first obtain a local work permit in order to be legally employed
here. That permit, however, does not automatically mean that the
non-citizen is thereby bound by local laws only, as averred by
petitioner. It does not at all imply a waiver of one’s national laws on
labor. Absent any clear and convincing evidence to the contrary, such
permit simply means that its holder has a legal status as a worker in the
issuing country.
 Noteworthy is the fact that respondent likewise applied for and secured an
Overseas Employment Certificate from the POEA through the Philippine
Embassy in Singapore. The Certificate, issued on March 8, 1999, declared
her a bona fide contract worker for Singapore. Under Philippine law, this
document authorized her working status in a foreign country and entitled
her to all benefits and processes under our statutes. Thus, even
assuming arguendo that she was considered at the start of her
employment as a "direct hire" governed by and subject to the laws,
common practices and customs prevailing in Singapore she
subsequently became a contract worker or an OFW who was covered
by Philippine labor laws and policies upon certification by the POEA.
At the time her employment was illegally terminated, she already
possessed the POEA employment Certificate.
 Moreover, petitioner admits that it is a Philippine corporation doing
business through a branch office in Singapore. Significantly, respondent’s
employment by the Singapore branch office had to be approved by
Benjamin P. Palma Gil,19 the president of the bank whose principal offices
 were in Manila. This circumstance militates against petitioner’s contention
that respondent was "locally hired"; and totally "governed by and subject
to the laws, common practices and customs" of Singapore, not of the
Philippines.
 In any event, we recall the following policy pronouncement of the Court
in Royal Crown Internationale v. NLRC:

"x x x. Whether employed locally or overseas, all Filipino workers enjoy the
protective mantle of Philippine labor and social legislation, contract
stipulations to the contrary notwithstanding. This pronouncement is in
keeping with the basic public policy of the State to afford protection to
labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed, and regulate the relations between workers
and employers.

Second Issue:

Proper Venue

 Section 1(a) of Rule IV of the NLRC Rules of Procedure reads:

"Section 1. Venue – (a) All cases which Labor Arbiters have authority to hear and
decide may be filed in the Regional Arbitration Branch having jurisdiction over
the workplace of the complainant/petitioner; Provided, however that cases of
Overseas Filipino Worker (OFW) shall be filed before the Regional Arbitration
Branch where the complainant resides or where the principal office of the
respondent/employer is situated, at the option of the complainant.

"For purposes of venue, workplace shall be understood as the place or locality

where the employee is regularly assigned when the cause of action arose. It shall
include the place where the employee is supposed to report back after a
temporary detail, assignment or travel. In the case of field employees, as well as
ambulant or itinerant workers, their workplace is where they are regularly
assigned, or where they are supposed to regularly receive their salaries/wages
or work instructions from, and report the results of their assignment to their
employers."

 Under the "Migrant Workers and Overseas Filipinos Act of 1995" (RA
8042), a migrant worker "refers to a person who is to be engaged, is
engaged or has been engaged in a remunerated activity in a state of which
he or she is not a legal resident; to be used interchangeably with overseas
Filipino worker."21 Undeniably, respondent was employed by petitioner in
its branch office in Singapore. Admittedly, she is a Filipino and not a legal
resident of that state. She thus falls within the category of "migrant
worker" or "overseas Filipino worker."
 As such, it is her option to choose the venue of her Complaint against
petitioner for illegal dismissal. The law gives her two choices: (1) at
the Regional Arbitration Branch (RAB) where she resides or (2) at the
RAB where the principal office of her employer is situated. Since her
dismissal by petitioner, respondent has returned to the Philippines --
specifically to her residence at Filinvest II, Quezon City. Thus, in filing her
Complaint before the RAB office in Quezon City, she has made a valid
choice of proper venue.
 [G.R. No. 117650. March 7, 1996.]

SULPICIO LINES, Petitioner, v. NATIONAL LABOR RELATIONS

COMMISSION AND JAIME CAGATAN, Respondents.

FACTS:

 Petitioner Sulpicio Lines, Inc., owner of MV Cotabato Princes, on January

15, 1992 dismissed private respondent Jaime Cagatan, a messman of the
said vessel, allegedly for being absent without leave for a "prolonged"
period of six (6) months.
 As a result of his dismissal, the private respondent filed a complaint for
illegal dismissal before the National Labor Relations Commission (NLRC)
through its National Capital Region Arbitration Branch in Manila,
docketed as NLRC-NCR Case No. 00-06-3163-92.
 Responding to the said complaint, Petitioner, on June 25, 1992, filed a
Motion to Dismiss on the ground of improper venue, stating, among other
things, that the case for illegal dismissal should have been lodged with the
NLRC’s Regional Branch No. VII (Cebu), as its main office was located in
Cebu City.
 LA denied Motion to Dismiss. Ruling that considering that the complainant
is a ship steward, traveled on board respondent’s ship along the Manila-
Enstancia-Iloilo-Zamboanga-Cotabato vice-versa route, Manila Can be
said to be part of the complainant’s territorial workplace.
 Appealed to NLRC. NLRC Sustained the LA’s Decision.
 Petitioner filed an MR with the contention that ship or vessel as workplace
is an extension of its homeport or principal place of business, and that
"being part of the territory of the homeport, (such) vessel in governed to a
large extent by the laws and is under the jurisdiction of the homeport.
Based on this submission, petitioner avers that its vessel-as-workplace is
"under the territorial jurisdiction of the Regional Arbitration branch where
(its) . . . principal office is located," which is Branch VII located in Cebu
City.

HELD:

We disagree.
 As early as 1911, this Court held that the question of venue essentially
relates to the trial and touches more upon the convenience of the parties,
rather than upon the substance and merits of the case. Our permissive
rules underlying provisions on venue are intended to assure
convenience for the plaintiff and his witnesses and to promote the
ends of justice. this axiom all the more finds applicability in cases
involving labor and management because of the principle, paramount
in our jurisdiction, that the State shall afford full protection to labor.
 Even in cases where venue has been stipulated by the parties by contract,
this Court has not hesitated to set aside agreements on venue if the same
would lead to a situation so grossly inconvenient to one party as to
virtually negate his claim.
 In the case at bench, it is not denied that while petitioner maintains its
principal office in Cebu City, it retains a major booking and shipping office
in Manila from which it earns considerable revenue, and from which it
hires and trains a significant number of its workforce. Its virulent
insistence on holding the proceedings in the NLRC’s regional arbitration
 branch in Cebu City is obviously a ploy to inconvenience the private
respondent, a mere steward who resides in Metro Manila, who would
obviously not be able to afford the frequent trips to Cebu City in order to
follow up his case.

 Section 1, Rule IV of the NLRC Rules of Procedure on Venue, provides that:

Section 1. Venue — (a) All cases in which Labor Arbiters have authority to
hear and decide may be filed in the Regional Arbitration Branch having
jurisdiction over the workplace of the complainant/petitioner.

 This provision is obviously permissive, for the said section uses the word
"may," allowing a different venue when the interests of substantial justice
demand a different one. In any case, as stated earlier, the Constitutional
protection accorded to labor is a paramount and compelling factor,
provided the venue chosen is not altogether oppressive to the employer.

 Moreover, Section 1, Rule IV of the 1990 NLRC Rules additionally provides

that, "for purposes of venue, workplace shall be understood as the place
or locality where the employee is regularly assigned when the cause of
action arose." Since the private respondent’s regular place of assignment
is the vessel V Cotabato Princes which plies the Manila-Estancia-Iloilo-
Zamboanga-Cotabato route, we are of the opinion that Labor Arbiter
Arthur L. Amansec was correct in concluding that Manila could be
considered part of the complainant’s territorial workplace. Respondent
NLRC, therefore, committed no grave abuse of discretion in sustaining the
labor arbiter’s denial of herein petitioner’s Motion to Dismiss.
 G.R. No. 124193. March 6, 1998

WILLIAM DAYAG, EDUARDO CORTON, EDGARDO CORTON, LEOPOLDO

NAGMA, ALOY FLORES, ROMEO PUNAY and EDWIN
DAYAG, Petitioners, v. HON. POTENCIANO S. CANIZARES, JR., NATIONAL
LABOR RELATIONS COMMISSION and YOUNGS CONSTRUCTION
CORPORATION, Respondents.

DECISION

FACTS:

 Petitioners were hired to work as tower crane operators by one Alfredo

Young, a building contractor doing business in the name of Young’s
construction. In 1991, they were transferred to Cebu City to work for
Young’s Shoemart Cebu Project. Petitioner William Dayag asked
permission to go to Manila to attend family matters and was allowed to do
so but was not paid for January 23-30 due to his accountability for the
loss of certain construction tools. The other petitioners left due to
harassment by young. Thereafter, petitioner banded together and filed a
complaint against Young before the NCR Arbitration Branch NLRC which
was assigned to Labor Arbiter Cenizares.

 Further, Young filed a “Motion to transfer the case” to the Reginal

Arbitration Branch, Region VII of the NLRC. He contended that the case
should be filed in Cebu City because it is the location of the workplace of
the petitioner. However, it was opposed by the petitioner on the ground
that they are both form Metro Manila and that they could not afford trips
to Cebu, in addition, they claimed that respondent’s main office is in
Corinthian Garden in Quezon City.

 Labor Arbiter Cenizares granted Young’s motion to transfer the case in

Cebu. Petitioner appealed to NLRC but such was dismissed. Hence,
they filed a MFR and this time the commission set aside its previous
decision and remanded the case to the original arbitration branch of the
NCR for further proceedings. On the other hand, Young filed his own MFR
and the NLRC reinstated its first decision directing the transfer of the case
to Cebu City;

ISSUE: WON the LA acted with grave abuse of discretion when it entertained
Youngs motion to transfer venue

HELD:

We find no merit in petitioners argument.

 In a long line of decisions,5 this Court has consistently ruled that the
application of technical rules of procedure in labor cases may be relaxed
to serve the demands of substantial justice. As provided by Article 221 of
the Labor Code rules of evidence prevailing in courts of law or equity shall
not be controlling and it is the spirit and intention of this Code that the
Commission and its members and the Labor Arbiters shall use every and
all reasonable means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law or procedure, all in
the interest of due process. Furthermore, while it is true that any motion
that does not comply with the requirements of Rule 15 should not be
 accepted for filing and, if filed, is not entitled to judicial cognizance, this
Court has likewise held that where a rigid application of the rule will result
in a manifest failure or miscarriage of justice, technicalities may be
disregarded in order to resolve the case. Litigations should, as much as
possible, be decided on the merits and not on technicalities.
 Given the foregoing, it seems improper to nullify Youngs motion on a mere
technicality. Petitioners averments should be given scant consideration to
give way to the more substantial matter of equitably determining the rights
and obligations of the parties. It need not be emphasized that rules of
procedure must be interpreted in a manner that will help secure and not
defeat justice.
 Likewise, petitioners harp on Youngs so-called waiver of his right to
contest the venue of the instant case. They argue that Young is estopped
from questioning the venue herein as his motion to transfer venue was
actually a position paper, a close scrutiny of the same purportedly showing
that he admitted and denied certain allegations found in petitioners
complaint.
 Petitioners contention rings hollow. Even if the questioned motion was
at the same time a position paper, Section 1(c) of Rule IV provides:
(w)hen improper venue is not objected to before or at the time of the
filing of position papers, such question shall be deemed waived
(Emphasis supplied). Consequently, there is no waiver of improper
venue if a party questions venue simultaneously with the filing of a
position paper. Moreover, nowhere in the New Rules of Procedure of
the NLRC is there a requirement that a party must object solely to
venue, on penalty of waiving the same. In fact, Section 1(d) provides
that:

The venue of an action may be changed or transferred to a different

Regional Arbitration Branch other than where the complaint was filed by
written agreement of the parties or when the Commission or Labor Arbiter
before whom the case is pending so orders, upon motion by the proper
party in meritorious cases (Emphasis supplied).

Youngs acts are in consonance with this provision, for he seasonably made
representations to transfer the venue of the action in the proper motion.

 Young cannot, however, derive comfort from the foregoing, this petition
having been overtaken by events. In the recent case of Sulpicio Lines, Inc.
vs. NLRC12 this Court held that the question of venue essentially
pertains to the trial and relates more to the convenience of the
parties rather than upon the substance and merits of the case. It
underscored the fact that the permissive rules underlying provisions on
venue are intended to assure convenience for the plaintiff and his
witnesses and to promote the ends of justice. With more reason does the
principle find applicability in cases involving labor and management
because of the doctrine well-entrenched in our jurisdiction that the State
shall afford full protection to labor. The Court held that Section 1(a),
Rule IV of the NLRC Rules of Procedure on Venue was merely
permissive. In its words:

This provision is obviously permissive, for the said section uses the
word may, allowing a different venue when the interests of substantial
justice demand a different one. In any case, as stated earlier, the
Constitutional protection accorded to labor is a paramount and compelling
 factor, provided the venue chosen is not altogether oppressive to the
employer.

 The rationale for the rule is obvious. The worker, being the
economically-disadvantaged party whether as
complainant/petitioner or as respondent, as the case may be, the
nearest governmental machinery to settle the dispute must be placed
at his immediate disposal, and the other party is not to be given the
choice of another competent agency sitting in another place as this
will unduly burden the former.13 In fact, even in cases where venue
has been stipulated by the parties, this Court has not hesitated to set
aside the same if it would lead to a situation so grossly inconvenient
to one party as to virtually negate his claim. Again, in Sulpicio Lines,
this Court, citing Sweet Lines vs. Teves,14 held
 In the case at hand, the ruling specifying the National Capital Region
Arbitration Branch as the venue of the present action cannot be
considered oppressive to Young. His residence in Corinthian Gardens also
serves as his correspondent office. Certainly, the filing of the suit in the
National Capital Region Arbitration Branch in Manila will not cause him
as much inconvenience as it would the petitioners, who are now residents
of Metro Manila, if the same was heard in Cebu. Hearing the case in Manila
would clearly expedite proceedings and bring about the speedy resolution
of instant case.
 G.R. No. 124100. April 1, 1998

PHILTRANCO SERVICE ENTERPRISES, INC., Petitioner, v. NATIONAL

LABOR RELATIONS COMMISSION and MR. ROBERTO NIEVA, Respondents.

FACTS:

 Roberto Nieva who was employed as a driver by petitioner Philtranco

Services Enterprises, Inc. (hereafter Philtranco) on April 13, 1977, was
assigned to the Legaspi City-Pasay City route. He sideswiped an owner-
type jeep, damaging the latters park light. Unfortunately, the vehicles
owner turned out to be a PC colonel who arrested Nieva and brought him
to Camp Crame where the corresponding criminal complaint was filed
against him.
 Nieva obtained his release from detention by virtue of a bail bond secured
by Philtranco. He was suspended by the latter for thirty days. Nieva
reported back to work after serving his suspension. A few days after
resuming his driving duties, however, he was re-arrested on the ground
that his bail bond was fake. Nieva reported the incident to the management
of Philtranco. On October 15, 1989, Nieva was advised by Philtrancos
administrative officer, Epifanio Llado, that to avoid re-arrest, he would
have to refrain from driving until a settlement could be reached with the
jeep owner. From then on, Nieva would report for work only to be told to
wait until his case was settled. The case was finally settled on July 20,
1991, with Philtranco paying for the damages to the jeep. Three days
thereafter, Nieva reported for work, but he was requested to file a new
application as he was no longer considered an employee of Philtranco,
allegedly for being absent without leave from October 19 to November 20,
1989.
 Aggrieved by this turn of events, Nieva filed a complaint for illegal dismissal
and 13th month pay with the NLRCs National Capital Region Arbitration
Branch in Manila, which docketed the same as NLRC NCR Case No. 03-
01891-92.
 Philtraco filed a position paper with motion to dismiss, stating, among
other things, that the complaint should have been lodged with the NLRCs
Regional Arbitration Branch in Legaspi City, not only because Nieva was a
resident thereof, but also because the latter was hired, assigned, and
based in Legaspi City.
 The motion to dismiss was denied by the labor arbiter

ISSUE: WON the venue was proper

The petition lacks merit.

 As regards the first issue, this Court has previously declared that the
question of venue essentially pertains to the trial and relates more to the
convenience of the parties rather than upon the substance and merits of
the case.4 Provisions on venue are intended to assure convenience for the
plaintiff and his witnesses and to promote the ends of justice. In fact,
Section 1(a), Rule IV of the New Rules of Procedure of the NLRC, cited by
Philtranco in support of its contention that venue of the illegal dismissal
case filed by Nieva is improperly laid, speaks of the
complainant/petitioners workplace, evidently showing that the rule is
intended for the exclusive benefit of the worker. This being the case, the
worker may waive said benefit.5
 Furthermore, the aforesaid Section has been declared by this Court to be
merely permissive. In Dayag vs. NLRC,6 this Court held that:

This provision is obviously permissive, for the said section uses the word
may, allowing a different venue when the interests of substantial justice
demand a different one. In any case, as stated earlier, the Constitutional
protection accorded to labor is a paramount and compelling factor,
provided the venue chosen is not altogether oppressive to the employer.

 Moreover, Nieva, as a driver of Philtranco, was assigned to the Legaspi

City-Pasay City route. Sulpicio Lines, Inc. vs. NLRC7 is exactly in point. In
said case, we held that:

Section 1, Rule IV of the 1990 NLRC Rules additionally provides that, for
purposes of venue, workplace shall be understood as the place or locality
where the employee is regularly assigned when the cause of action arose.
Since the private respondents regular place of assignment is the vessel MV
Cotabato Princess which plies the Manila-Estancia-Iloilo-Zamboanga-
Cotabato route, we are of the opinion that Labor Arbiter Arthur L. Amansec
was correct in concluding that Manila could be considered part of the
complainants territorial workplace.

 From the foregoing, it is obvious that the filing of the complaint with the
National Capital Region Arbitration Branch was proper, Manila being
considered as part of Nievas workplace by reason of his plying the Legaspi
City-Pasay City route.
G.R. No. L-56431 January 19, 1988

NATIONAL UNION OF BANK EMPLOYEES, In Its Own Right And In Behalf

Of CBTC EMPLOYEES Affiliated With It; CBTC EMPLOYEES UNION, In Its
Own Right And Interest And In Behalf Of All CBTC Rank And File
Employees Including Its Members, BENJAMIN GABAT, BIENVENIDO
MORALEDA, ELICITA GAMBOA, FAUSTINO TEVES, SALVADOR LISING,
and NESTOR DE LOS SANTOS, petitioners,
vs.
THE HON. JUDGE ALFREDO M. LAZARO, CFI-MANILA BRANCH XXXV;
COMMERCLKL BANK AND TRUST COMPANY OF THE PHILIPPINES; BANK
OF THE PHILIPPINE ISLANDS; AYALA CORPORATION; MANUEL J.
MARQUEZ; ENRIQUE ZOBEL; ALBERTO VILLA-ABRILLE; VICENTE A.
PACIS, JR.; and DEOGRACIAS A. FERNANDO, respondents.

SARMIENTO, J.:

FACTS:

The antecedent facts are not disputed.

 On July 1, 1977, the Commercial Bank and Trust Company, a Philippine

banking institution, entered into a collective bargaining agreement with
the Commercial Bank and Trust Company Union, representing the rank
and file of the bank with a membership of over one thousand employees,
and an affiliated local of the National Union of Bank Employees, a national
labor organization. The agreement was effective until June 30, 1980, with
an automatic renewal clause until the parties execute a new agreement.
 On May 20, 1980, the union, together with the National Union of Bank
Employees, submitted to the bank management proposals for the
renegotiation of a new collective bargaining agreement. The following day,
however, the bank suspended negotiations with the union. The bank had
meanwhile entered into a merger with the Bank of the Philippine Islands,
another Philippine banking institution, which assumed all assets and
liabilities thereof.
 As a consequence, the union went to the then Court of First Instance of
Manila, presided over by the respondent Judge, on a complaint for specific
performance, damages, and preliminary injunction against the private
respondents.
 Predictably, the private respondents moved for the dismissal of the case
on the ground, essentially, of lack of jurisdiction of the court.
 On November 26, 1980, the respondent Judge issued an order, dismissing
the case for lack of jurisdiction. According to the court, the complaint
partook of an unfair labor practice dispute notwithstanding the incidental
claim for damages, jurisdiction over which is vested in the labor arbiter.

ISSUE:

The sole issue in this special civil action for certiorari is whether or not the
courts may take cognizance of claims for damages arising from a labor
controversy.
 RULING:

We sustain the dismissal of the case, which is, as correctly held by the
respondent court, an unfair labor practice controversy within the original
and exclusive jurisdiction of the labor arbiters and the exclusive
appellate jurisdiction of the National Labor Relations Commission. The
claim against the Bank of Philippine Islands — the principal
respondent according to the petitioners — for allegedly inducing the
Commercial Bank and Trust Company to violate the existing collective
bargaining agreement in the process of re-negotiation, consists mainly
of the civil aspect of the unfair labor practice charge referred to under
Article 247 2 of the Labor Code.

Under Article 248 3 of the Labor Code, it shall be an unfair labor practice:

(a) To interfere with, restrain or coerce employees in the exercise of

their right to self-organization;

xxx xxx xxx

(g) To violate the duty to bargain collectively as prescribed by this

Code;

 The act complained of is broad enough to embrace either provision. Since

it involves collective bargaining — whether or not it involved an
accompanying violation of the Civil Code — it may rightly be categorized
as an unfair labor practice. The civil implications thereof do not defeat its
nature as a fundamental labor offense.
 As we stated, the damages (allegedly) suffered by the petitioners only
form part of the civil component of the injury arising from the unfair
labor practice. Under Article 247 of the Code, "the civil aspects of all cases
involving unfair labor practices, which may include claims for damages
and other affirmative relief, shall be under the jurisdiction of the labor
arbiters.
 Jurisdiction over unfair labor practice cases, moreover, belongs generally
to the labor department of the government, never the courts.
 The fact that the Bank of the Philippine Islands is not a party to the
collective bargaining agreement, for which it "cannot be sued for unfair
labor practice at the time of the action," 8 cannot bestow on the respondent
court the jurisdiction it does not have. In Cebu Portland Cement Co. v.
Cement Workers' Union, 9 we held:

xxx xxx xxx

There is no merit in the allegation. In the first place, it must be

remembered that jurisdiction is conferred by law; it is not
determined by the existence of an action in another tribunal. In
other words, it is not filing of an unfair labor case in the Industrial
Court that divests the court of first instance jurisdiction over actions
properly belonging to the former. It is the existence of a controversy
that properly falls within the exclusive jurisdiction of the Industrial
Court and to which the civil action is linked or connected that
removes said civil case from the competence of the regular courts. It
is for this reason that civil actions found to be intertwined with or
arising out of, a dispute exclusively cognizable by the Court of
Industrial Relations were dismissed, even if the cases were
 commenced ahead of the unfair labor practice proceeding, and
jurisdiction to restrain picketing was decreed to belong to the Court
of Industrial Relations although no unfair labor practice case has as
yet been instituted. For the court of first instance to lose authority
to pass upon a case, therefore, it is enough that unfair labor practice
case is in fact involved in or attached to the action, such fact of
course being established by sufficient proof. 10

 Neither does the fact that the Bank of the Philippine Islands "was not
an employer at the time the act was committed' abate a recourse to
the labor arbiter. It should be noted indeed that the Bank of the
Philippine Islands assumed "all the assets and liabilities" 16 of the
Commercial Bank and Trust Company. Moreover, under the Corporation
Code:

xxx xxx xxx

5. The surviving or consolidated corporation shall be responsible

and liable for all the liabilities and obligations of each of the
constituent corporations in the same manner as if such surviving or
consolidated corporation had itself incurred such liabilities or
obligations; and any claim, action or proceeding pending by or
against any of such constituent corporations may be prosecuted by
or against the surviving or consolidated corporation, as the case may
be. Neither the rights of creditors nor any lien upon the property of
any of such constituent corporations shall be impaired by such
merger or consolidation. 17
G.R. No. 76989 September 29, 1987

MANILA MANDARIN EMPLOYEES UNION, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, and MELBA C.
BELONCIO, respondents.

FACTS:

 Melba C. Beloncio, an employee of Manila Mandarin Hotel since 1976 and

at the time of her dismissal, assistant head waitress at the hotel's coffee
shop, was expelled from the petitioner Manila Mandarin Employees Union
for acts allegedly inimical to the interests of the union.
 The union demanded the dismissal from employment of Beloncio on the
basis of the union security clause of their collective bargaining agreement
and the Hotel acceded by placing Beloncio on forced leave effective August
 Two days before the effective date of her forced leave or on August 8, 1984,
Beloncio filed a complaint for unfair labor practice and illegal dismissal
against herein petitioner-union and Manila Mandarin Hotel Inc. before the
NLRC, Arbitration Branch.
 Petitioner-union filed a motion to dismiss on grounds that the complainant
had no cause of action against it and the NLRC had no jurisdiction over
the subject matter of the complaint. This motion was denied by the Labor
Arbiter.

ISSUE:

WON the NLRC has jurisdiction over the case.

HELD:

 On the issue of the NLRC jurisdiction over the case, the Court finds no
grave abuse of discretion in the NLRC conclusion that the dispute is not
purely intra-union but involves an interpretation of the collective
bargaining agreement (CBA) provisions and whether or not there was an
illegal dismissal. Under the CBA, membership in the union may be lost
through expulsion only if there is non-payment of dues or a
member organizes, joins, or forms another labor organization. The charge
of disloyalty against Beloncio arose from her emotional remark to a
waitress who happened to be a union steward, "Wala akong tiwala sa
Union ninyo." The remark was made in the course of a heated discussion
regarding Beloncio's efforts to make a lazy and recalcitrant waiter adopt a
better attitude towards his work.

 We agree with the Solicitor General when he noted that:

... The Labor Arbiter explained correctly that "(I)f the only question
is the legality of the expulsion of Beloncio from the Union
undoubtedly, the question is one cognizable by the BLR (Bureau of
Labor Relations). But, the question extended to the dismissal of
Beloncio or steps leading thereto. Necessarily, when the hotel
decides the recommended dismissal, its acts would be subject to
scrutiny. Particularly, it will be asked whether it violates or not the
existing CBA. Certainly, violations of the CBA would be unfair labor
practice."
Article 250 of the Labor Code provides the following:

Art. 250. Unfair labor practices of labor organizations.

— It shall be unfair labor practice for a labor
organization, its officers, agents or representatives:

xxx xxx xxx

(b) To cause or attempt to cause an employer to

discriminate against an employee, including
discrimination against an employee with respect to
whom membership in such organization has been
denied or to terminate an employee on any ground other
than the usual terms and conditions under which
membership or continuation of membership is made
available to other members. (Emphasis supplied)

Article 217 of the Labor Code also provides:

Art. 217. Jurisdiction of Labor Arbiters and the

Commission — (a) The Labor Arbiters shall have the
original and exclusive jurisdiction to hear and decide
... the following cases involving all workers, whether
agricultural or nonagricultural;

(1) Unfair labor practice cases;

xxx xxx xxx

(b) The Commission shall have exclusive appellate

jurisdiction over all cases decided by Labor Arbiters.
(Rollo, pp. 155-157.)
G.R. No. 118216 March 9, 2000

DELTAVENTURES RESOURCES, INC., petitioner,

vs.
HON. FERNANDO P. CABATO, Presiding Judge Regional Trial Court, La
Trinidad, Benguet, Branch 62; HON. GELACIO L. RIVERA, JR., Executive
Labor Arbiter, NLRC-CAR, Baguio City, ADAM P. VENTURA, Deputy-
Sheriff, NLRC-CAR, Baguio City; ALEJANDRO BERNARDINO, AUGUSTO
GRANADOS, PILANDO TANGAY, NESTOR RABANG, RAY DAYAP, MYRA
BAYAONA, VIOLY LIBAO, AIDA LIBAO, JESUS GATCHO and GREGORIO
DULAY, respondents.

QUISUMBING, J.:

 NLRC – RAB CAR rendered a Decision declaring respondent guilty of Illegal

Dismissal and Unfair Labor Practice.
 On May 19, 1994, complainants in the abovementioned labor case filed
before the Commission a motion for the issuance of a writ of execution as
respondent's appeal to the Commission and this Court5 were respectively
denied.
 A writ of execution was issued - directing NLRC Deputy Sheriff Adam
Ventura to execute the judgment against respondents, Green Mountain
Farm, Roberto Ongpin and Almus Alabe Sheriff Ventura then proceeded
to enforce the writ by garnishing certain personal properties of
respondents.
 Findings that said judgment debtors do not have sufficient personal
properties to satisfy the monetary award, Sheriff Ventura proceeded to levy
upon a real property covered by Tax Declaration No. 9697, registered in
the name of Roberto Ongpin, one of the respondents in the labor case.
 Thereafter, Sheriff Ventura caused the publication on the July 17, 1994
edition of the Baguio Midland Courier the date of the public auction of said
real property.
 On July 27, 1994, a month before the scheduled auction sale, herein
petitioner filed before the Commission a third-party claim7 asserting
ownership over the property levied upon and subject of the Sheriff notice
of sale.
 Labor Arbiter Rivera thus issued an order directing the suspension of the
auction sale until the merits of petitioner's claim has been resolved.8
 However, on August 16, 1994, petitioner filed with the Regional Trial Court
of La Trinidad, Benguet a complaint for injunction and damages, with a
prayer for the issuance of a temporary retraining order against Sheriff
Ventura, reiterating the same allegations it raised in the third party claim
it field with the Commission.
 The next day, August 17, 1994, respondent Judge Cabato issued a
temporary restraining order, enjoining respondents in the civil case before
him to hold in abeyance any action relative to the enforcement of the
decision in the labor case.
 Petitioner likewise filed on August 30, 1994, an amended complaint10 to
implead Labor arbiter Rivera and herein private respondent-laborers.
 Further, on September 20, 1994, petitioner, filed with the Commission a
manifestation - questioning the latter's authority to hear the case, the
matter being within the jurisdiction of the regular courts. The
manifestation however, was dismissed by Labor arbiter Rivera on October
3, 1994.
  Meanwhile, on September 20, 1994, private respondent-laborers, moved
for the dismissal of the civil case on the ground of the court's lack of
jurisdiction.13 Petitioner filed its opposition to said motion on October 4,
1994.
 RTC dismissed the case for lack of jurisdiction.
 Petitioner assailed the decision stating that the RTC erred in dismissing
the claim on the ground of lack of jurisdiction. Further, it contends that
the NLRC-CAR did not acquire jurisdiction over the claim for it did not
impugn the decision of the NLRC-CAR but merely questioned the propriety
of the levy made by Sheriff Ventura.
 In support of its claim, petitioner asserts that the instant case does not
involve a labor dispute, as no-employer-employee relationship exists
between the parties. Nor is the petitioner's case related in any way to either
parties' case before the NLRC-CAR hence, not within the jurisdiction of the
Commission.

ISSUE: Whether or not the trial court may take cognizance of the complaint filed
by petitioner and consequently provide the injunction relief sought.

HELD:

 Basic as a hornbook principle, jurisdiction over the subject matter of a

case is conferred by law and determined by the allegations in the
complainant18 which comprise a concise statement of the ultimate facts
constituting the petitioner's cause of action.19 Thus we have held that:

Jurisdiction over the subject-matter is determined upon the allegations

made in the complainant, irrespective of whether the plaintiff is entitled or
not entitled to recover upon the claim asserted therein - a matter resolved
only after and as a result of the trial. 20

 Petitioner filed the third-party claim before the court a quo by reason of a
writ of execution issued by the NLRC-CAR Sheriff against a property to
which it claims ownership. The writ was issued to enforce and execute the
commission's decision in NLRC Case No. 01-08-0165-89 (Illegal Dismissal
and Unfair Labor Practice) against Green Mountain Farm, Roberto Ongpin
and Almus Alabe.
 Ostensibly the complaint before the trial court was for the recovery
of possession and injunction, but in essence it was an action
challenging the legality or propriety of the levy vis-a-
vis the alias writ of execution, including the acts performed by the
Labor Arbiter and the Deputy Sheriff implementing the writ. The
complainant was in effect a motion to quash the writ of execution of a
decision rendered on a case properly within the jurisdiction of the Labor
Arbiter, to wit: Illegal Dismissal and Unfair Labor Practice. Considering the
factual setting, it is then logical to conclude that the subject matter of
the third party claim is but an incident of the labor case, a matter
beyond the jurisdiction of regional trial courts.
 Petitioner failed to realize that by filing its third-party claim with the
deputy sheriff, it submitted itself to the jurisdiction of the Commission
acting through the Labor Arbiter.
 It failed to perceive the fact that what it is really controverting is the
decision of the Labor arbiter and not the act of the deputy sheriff in
executing said order issued as a consequence of said decision rendered.
 Jurisdiction once acquired is not lost upon the instance of the parties but
continues until the case is terminated.23 Whatever irregularities attended
the issuance and execution of the alias writ of execution should be
referred to the same administrative tribunal which rendered the
decision.24 This is because any court which issued a writ of execution has
the inherent power, for the advancement of justice, to correct errors of its
ministerial officers and to control its own processes.
 The broad powers granted to the Labor Arbiter and to the National
Labor Relations Commission by Articles 217, 218 and 224 of the
Labor Code can only be interpreted as vesting in them jurisdiction
over incidents arising from, in connection with or relating to labor
disputes, as the controversy under consideration, to the exclusion of
the regular courts.
 [G.R. No. 142244. November 18, 2002.]

ATLAS FARMS, INC., Petitioner, v. NATIONAL LABOR RELATIONS

COMMISSION, JAIME O. DELA PEÑA and MARCIAL I.
ABION, Respondents.

FACTS:
 Private respondent Jaime O. dela Peña was employed as a veterinary aide
by petitioner in December 1975. He was among several employees
terminated in July 1989. On July 8, 1989, he was re-hired by petitioner
and given the additional job of feedmill operator. He was instructed to train
selected workers to operate the feedmill.
 On March 13, 1993, 4 Peña was allegedly caught urinating and defecating
on company premises not intended for the purpose.
 The farm manager of petitioner issued a formal notice directing him to
explain within 24 hours why disciplinary action should not be taken
against him for violating company rules and regulations. Peña refused,
however, to receive the formal notice.
 He never bothered to explain, either verbally or in writing, according to
petitioner.
 Thus, on March 20, 1993, a notice of termination with payment of his
monetary benefits was sent to him. He duly acknowledged receipt of his
separation pay of P13,918.67.
 From the start of his employment on July 8, 1989, until his termination
on March 20, 1993, Peña had worked for seven days a week, including
holidays, without overtime, holiday, rest day pay and service incentive
leave. At the time of his dismissal from employment, he was receiving P180
pesos daily wage, or an average monthly salary of P5,402.
 Co-respondent Marcial I. Abion was a carpenter/mason and a
maintenance man whose employment by petitioner commenced on
October 8, 1990. Allegedly, he caused the clogging of the fishpond drainage
resulting in damages worth several hundred thousand pesos when he
improperly disposed of the cut grass and other waste materials into the
pond’s drainage system. Petitioner sent a written notice to Abion, requiring
him to explain what happened, otherwise, disciplinary action would be
taken against him. He refused to receive the notice and give an
explanation, according to petitioner. Consequently, the company
terminated his services on October 27, 1992. He acknowledged receipt of
a written notice of dismissal, with his separation pay.
 Like Peña, Abion worked seven days a week, including holidays, without
holiday pay, rest day pay, service incentive leave pay and night shift
differential pay. When terminated on October 27, 1992, Abion was
receiving a monthly salary of P4,500.
 Peña and Abion filed separate complaints for illegal dismissal that were
later consolidated. Both claimed that their termination from service was
due to petitioner’s suspicion that they were the leaders in a plan to form a
union to compete and replace the existing management-dominated union.
 LA dismissed the complaint on the ground that the grievance machinery
in the collective bargaining agreement (CBA) had not yet been exhausted.
Private respondents availed of the grievance process, but later on refiled
the case before the NLRC in Region IV. They alleged "lack of sympathy" on
petitioner’s part to engage in conciliation proceedings.
 Their cases were consolidated in the NLRC.
  At the initial mandatory conference, petitioner filed a motion to dismiss,
on the ground of lack of jurisdiction, alleging private respondents
themselves admitted that they were members of the employees’ union with
which petitioner had an existing CBA. This being the case, according to
petitioner, jurisdiction over the case belonged to the grievance machinery
and thereafter the voluntary arbitrator, as provided in the CBA.
 In a decision dated January 30, 1996, the labor arbiter dismissed the
complaint for lack of merit, finding that the case was one of illegal
dismissal and did not involve the interpretation or implementation of any
CBA provision. He stated that Article 217 (c) of the Labor Code 6 was
inapplicable to the case.
 Further, the labor arbiter found that although both complainants did not
substantiate their claims of illegal dismissal, there was proof that private
respondents voluntarily accepted their separation pay and petitioner’s
financial assistance.
 NLRC reversed the LA’s decision.

ISSUE: Whether not NLRC has jurisdiction.

HELD:

 Article 217 of the Labor Code provides that labor arbiters have original and
exclusive jurisdiction over termination disputes. A possible exception is
provided in Article 261 of the Labor Code, which provides that —

The Voluntary Arbitrator or panel of voluntary arbitrators shall have

original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the
Collective Bargaining Agreement and those arising from the interpretation
or enforcement of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of a Collective
Bargaining Agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of
this article, gross violations of Collective Bargaining Agreement shall mean
flagrant and or malicious refusal to comply with the economic provisions
of such agreement.

The Commission, its Regional Offices and the Regional Directors of the
Department of Labor and Employment shall not entertain disputes,
grievances or matters under the exclusive and original jurisdiction of the
Voluntary Arbitrator or panel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the grievance Machinery or
Arbitration provided in the Collective Bargaining Agreement.

 But as held in Vivero v. CA, 14 "petitioner cannot arrogate into the powers
of Voluntary Arbitrators the original and exclusive jurisdiction of Labor
Arbiters over unfair labor practices, termination disputes, and claims for
damages, in the absence of an express agreement between the parties in
order for Article 262 of the Labor Code [Jurisdiction over other labor
disputes] to apply in the case at bar."

 Moreover, per Justice Bellosillo:

 It may be observed that under Policy Instruction No. 56 of the Secretary of
Labor, dated 6 April 1993, "Clarifying the Jurisdiction Between Voluntary
Arbitrators and Labor Arbiters Over Termination Cases and Providing
Guidelines for the Referral of Said Cases Originally Filed with the NLRC to
the NCMB," termination cases arising in or resulting from the
interpretation and implementation of collective bargaining agreements and
interpretation and enforcement of company personnel policies which were
initially processed at the various steps of the plant-level Grievance
Procedures under the parties’ collective bargaining agreements fall within
the original and exclusive jurisdiction of the voluntary arbitrator pursuant
to Art. 217 (c) and Art. 261 of the Labor Code; and, if filed before the Labor
Arbiter, these cases shall be dismissed by the Labor Arbiter for lack of
jurisdiction and referred to the concerned NCMB Regional Branch for
appropriate action towards and expeditious selection by the parties of a
Voluntary Arbitrator or Panel of Arbitrators based on the procedures
agreed upon in the CBA.

 As earlier stated, the instant case is a termination dispute falling under

the original and exclusive jurisdiction of the Labor Arbiter, and does not
specifically involve the application, implementation or enforcement of
company personnel policies contemplated in Policy Instruction No. 56.
Consequently, Policy Instruction No. 56 does not apply in the case at bar.

 Records show, however, that private respondents sought without success

to avail of the grievance procedure in their CBA. 16 On this point,
petitioner maintains that by so doing, private respondents recognized that
their cases still fell under the grievance machinery. According to petitioner,
without having exhausted said machinery, the private respondents filed
their action before the NLRC, in a clear act of forum-shopping.

 However, it is worth pointing out that private respondents went to the

NLRC only after the labor arbiter dismissed their original complaint for
illegal dismissal. Under these circumstances private respondents had to
find another avenue for redress.

 We agree with the NLRC that it was petitioner who failed to show proof
that it took steps to convene the grievance machinery after the labor
arbiter first dismissed the complaints for illegal dismissal and directed the
parties to avail of the grievance procedure under Article VII of the existing
CBA.

 They could not now be faulted for attempting to find an impartial forum,
after petitioner failed to listen to them and after the intercession of the
labor arbiter proved futile. The NLRC had aptly concluded in part that
private respondents had already exhausted the remedies under the
grievance procedure. 18 It erred only in finding that their cause of action
was ripe for arbitration.

 In the case of Maneja v. NLRC, 19 we held that the dismissal case does
not fall within the phrase "grievances arising from the interpretation
or implementation of the collective bargaining agreement and those
arising from the interpretation or enforcement of company personnel
 policies." In Maneja, the hotel employee was dismissed without hearing.
We ruled that her dismissal was unjustified, and her right to due process
was violated, absent the twin requirements of notice and hearing. We also
held that the labor arbiter had original and exclusive jurisdiction over
the termination case, and that it was error to give the voluntary
arbitrator jurisdiction over the illegal dismissal case.

 One significant fact in the present petition also needs stressing. Pursuant
to Article 260 21 of the Labor Code, the parties to a CBA shall name or
designate their respective representatives to the grievance machinery and
if the grievance is unsettled in that level, it shall automatically be referred
to the voluntary arbitrators designated in advance by the parties to a CBA.
Consequently only disputes involving the union and the company
shall be referred to the grievance machinery or voluntary arbitrators.
In these termination cases of private respondents, the union had no
participation, it having failed to object to the dismissal of the
employees concerned by the petitioner. It is obvious that arbitration
without the union’s active participation on behalf of the dismissed
employees would be pointless, or even prejudicial to their cause.
 [G.R. No. 121948. October 8, 2001.]

PERPETUAL HELP CREDIT COOPERATIVE, INC., Petitioner, v.

BENEDICTO FABURADA, SISINITA VILLAR, IMELDA TAMAYO, HAROLD
CATIPAY, and the NATIONAL LABOR RELATIONS COMMISSION, Fourth
Division, Cebu City, Respondents.

DECISION

FACTS:

 Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and Harold Catipay,

private respondents, filed a complaint against the Perpetual Help Credit
Cooperative, Inc. (PHCCI), Petitioner, with the Arbitration Branch,
Department of Labor and Employment (DOLE), Dumaguete City, for illegal
dismissal, premium pay on holidays and rest days, separation pay, wage
differential, moral damages, and attorney’s fees.
 Petitioner PHCCI filed a motion to dismiss the complaint on the ground
that there is no employer-employee relationship between them as private
respondents are all members and co-owners of the cooperative.
Furthermore, private respondents have not exhausted the remedies
provided in the cooperative by-laws.

ISSUE: The issue for our resolution is whether or not respondent judge
committed grave abuse of discretion in ruling that there is an employer-employee
relationship between the parties and that private respondents were illegally
dismissed.

HELD:

 In determining the existence of an employer-employee relationship, the

following elements are considered: (1) the selection and engagement of the
worker or the power to hire; (2) the power to dismiss; (3) the payment of
wages by whatever means; and (4) the power to control the worker’s
conduct, with the latter assuming primacy in the overall consideration. No
particular form of proof is required to prove the existence of an employer-
employee relationship. Any competent and relevant evidence may show the
relationship.

The above elements are present here. Petitioner PHCCI, through Mr.
Edilberto Lantaca, Jr., its Manager, hired private respondents to work for
it. They worked regularly on regular working hours, were assigned specific
duties, were paid regular wages and made to accomplish daily time records
just like any other regular employee. They worked under the supervision
of the cooperative manager. But unfortunately, they were dismissed.

That an employer-employee exists between the parties is shown by the

averments of private respondents in their respective affidavits, carefully
considered by respondent NLRC in affirming the Labor Arbiter’s decision,

 As regular employees or workers, private respondents are entitled to

security of tenure. Thus, their services may be terminated only for a valid
cause, with observance of due process.
 We hold that private respondents have been illegally dismissed.

 Petitioner contends that the labor arbiter has no jurisdiction to take

cognizance of the complaint of private respondents considering that they
failed to submit their dispute to the grievance machinery as required by
P.D. 175 (strengthening the Cooperative Movement) 8 and its
implementing rules and regulations under LOI 23. Likewise, the
Cooperative Development Authority did not issue a Certificate of Non-
Resolution pursuant to Section 8 of R.A. 6939 or the Cooperative
Development Authority Law.

 There is no evidence that private respondents are members of petitioner

PHCCI and even if they are, the dispute is about payment of wages,
overtime pay, rest day and termination of employment. Under Art. 217 of
the Labor Code, these disputes are within the original and exclusive
jurisdiction of the Labor Arbiter.

As illegally dismissed employees, private respondents are therefore entitled

to reinstatement without loss of seniority rights and other privileges and
to full backwages, inclusive of allowances, plus other benefits or their
monetary equivalent computed from the time their compensation was
withheld from them up to the time of their actual reinstatement. 9 Since
they were dismissed after March 21, 1989, the effectivity date of R.A. 6715
10 they are granted full backwages, meaning, without deducting from their
backwages the earnings derived by them elsewhere during the period of
their illegal dismissal. 11 If reinstatement is no longer feasible, as when
the relationship between petitioner and private respondents has become
strained, payment of their separation pay in lieu of reinstatement is in
order. 12chanrob1es virtua1 1aw 1ibrary
 [G.R. No. 124382. August 16, 1999]

PASTOR DIONISIO V. AUSTRIA, Petitioner, v. HON. NATIONAL LABOR

RELATIONS COMMISSION (Fourth Division), CEBU CITY, CENTRAL
PHILIPPINE UNION MISSION CORPORATION OF THE SEVENTH-DAY
ADVENTIST, ELDER HECTOR V. GAYARES, PASTORS REUBEN MORALDE,
OSCAR L. ALOLOR, WILLIAM U. DONATO, JOEL WALES, ELY SACAY,
GIDEON BUHAT, ISACHAR GARSULA, ELISEO DOBLE, PROFIRIO BALACY,
DAVID RODRIGO, LORETO MAYPA, MR. RUFO GASAPO, MR. EUFRONIO
IBESATE, MRS. TESSIE BALACY, MR. ZOSIMO KARA-AN, and MR.
ELEUTERIO LOBITANA, Respondents.

DECISION

KAPUNAN, J.:

The Seventh Day Adventists(SDA) is a religious corporation under Philippine law. The petitioner was a
pastor of the SDA for 28 years from 1963 until 1991, when his services were terminated.

On various occasions from August to October 1991, Austria received several communications form Ibesate,
the treasurer of the Negros Mission, asking him to admit accountability and responsibility for the church
tithes and offerings collected by his wife, Thelma Austria, in his district and to remit the same to the Negros
Mission.

The petitioner answered saying that he should not be made accountable since it was Pastor Buhat and
Ibesate who authorized his wife to collect the tithes and offerings since he was very ill to be able to do the
collecting.

A fact-finding committee was created to investigate. The petitioner received a letter of dismissal citing:

1) Misappropriation of denominational funds;

2) Willful breach of trust;

3) Serious misconduct;

4) Gross and habitual neglect of duties; and

5) Commission of an offense against the person of 
 employer's duly authorized representative as grounds for
the termination of his services.

Petitioner filed a complaint with the Labor Arbiter for illegal dismissal, and sued the SDA
for reinstatement and backwages plus damages. Decision was rendered in favor of petitioner.

SDA appealed to the NLRC. Decision was rendered in favor of respondent.

Issue:

1) Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide
the complaint filed by petitioner against the SDA;

Held/Ratio:
HELD:

 Private respondents contend that by virtue of the doctrine of separation of

church and state, the Labor Arbiter and the NLRC have no jurisdiction to
entertain the complaint filed by petitioner. Since the matter at bar allegedly
involves the discipline of a religious minister, it is to be considered a purely
ecclesiastical affair to which the State has no right to interfere.
 The contention of private respondents deserves scant consideration. The
principle of separation of church and state finds no application in this
case.
 The case at bar does not concern an ecclesiastical or purely religious
affair as to bar the State from taking cognizance of the same. An
ecclesiastical affair is one that concerns doctrine, creed, or form or
worship of the church, or the adoption and enforcement within a
religious association of needful laws and regulations for the
government of the membership, and the power of excluding from such
associations those deemed unworthy of membership.
 The case at bar does not even remotely concern any of the abovecited
examples. While the matter at hand relates to the church and its religious
minister it does not ipso facto give the case a religious significance. Simply
stated, what is involved here is the relationship of the church as an
employer and the minister as an employee. It is purely secular and has no
relation whatsoever with the practice of faith, worship or doctrines of the
church. In this case, petitioner was not excommunicated or expelled from
the membership of the SDA but was terminated from employment. Indeed,
the matter of terminating an employee, which is purely secular in
nature, is different from the ecclesiastical act of expelling a member
from the religious congregation.
 Finally, as correctly pointed out by petitioner, private respondents are
estopped from raising the issue of lack of jurisdiction for the first time on
appeal. It is already too late in the day for private respondents to question
the jurisdiction of the NLRC and the Labor Arbiter since the SDA had fully
participated in the trials and hearings of the case from start to finish.
 The Court has already ruled that the active participation of a party against
whom the action was brought, coupled with his failure to object to the
jurisdiction of the court or quasi-judicial body where the action is pending,
is tantamount to an invocation of that jurisdiction and a willingness to
abide by the resolution of the case and will bar said party from later on
impugning the court or bodys jurisdiction.25 Thus, the active participation
of private respondents in the proceedings before the Labor Arbiter and the
NLRC mooted the question on jurisdiction.
G.R. No. 113191 September 18, 1996

DEPARTMENT OF FOREIGN AFFAIRS, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER
NIEVES V. DE CASTRO and JOSE C. MAGNAYI, respondents.

VITUG, J.:

On 27 January 1993, private respondent Magnayi filed an illegal dismissal case

against Asian Development Bank. Two summonses were served, one sent directly
to the ADB and the other through the Department of Foreign Affairs. ADB and
the DFA notified respondent Labor Arbiter that the ADB, as well as its President
and Officers, were covered by an immunity from legal process except for
borrowings, guaranties or the sale of securities pursuant to Article 50(1) and
Article 55 of the Agreement Establishing the Asian Development Bank (the
"Charter") in relation to Section 5 and Section 44 of the Agreement Between The
Bank and The Government Of The Philippines Regarding The Bank's
Headquarters (the "Headquarters Agreement").

The Labor Arbiter took cognizance of the complaint on the impression that the
ADB had waived its diplomatic immunity from suit and, in time, rendered a
decision in favor Magnayi. The ADB did not appeal the decision. Instead, on 03
November 1993, the DFA referred the matter to the NLRC; in its referral, the DFA
sought a "formal vacation of the void judgment." When DFA failed to obtain a
favorable decision from the NLRC, it filed a petition for certiorari.

ISSUE:

1. Whether or not ADB is immune from suit

2. Whether or not by entering into service contracts with different private

companies, ADB has descended to the level of an ordinary party to a commercial
transaction giving rise to a waiver of its immunity from suit
1. Under the Charter and Headquarters Agreement, the ADB enjoys immunity
from legal process of every form, except in the specified cases of borrowing and
guarantee operations, as well as the purchase, sale and underwriting of
securities. The Bank’s officers, on their part, enjoy immunity in respect of all
acts performed by them in their official capacity. The Charter and the
Headquarters Agreement granting these immunities and privileges are treaty
covenants and commitments voluntarily assumed by the Philippine government
which must be respected.

Being an international organization that has been extended a diplomatic status,

the ADB is independent of the municipal law. "One of the basic immunities of an
international organization is immunity from local jurisdiction, i.e., that it is
immune from the legal writs and processes issued by the tribunals of the country
where it is found. The obvious reason for this is that the subjection of such an
organization to the authority of the local courts would afford a convenient
medium thru which the host government may interfere in their operations or
even influence or control its policies and decisions of the organization; besides,
such subjection to local jurisdiction would impair the capacity of such body to
discharge its responsibilities impartially on behalf of its member-states."

2. No. The ADB didn't descend to the level of an ordinary party to a commercial
transaction, which should have constituted a waiver of its immunity from suit,
by entering into service contracts with different private companies. “There are
two conflicting concepts of sovereign immunity, each widely held and firmly
established. According to the classical or absolute theory, a sovereign cannot,
without its consent, be made a respondent in the Courts of another sovereign.
According to the newer or restrictive theory, the immunity of the sovereign is
recognized only with regard to public acts or acts jure imperii of a state, but not
with regard to private act or acts jure gestionis.

“Certainly, the mere entering into a contract by a foreign state with a private
party cannot be the ultimate test. Such an act can only be the start of the inquiry.
The logical question is whether the foreign state is engaged in the activity in the
regular course of business. If the foreign state is not engaged regularly in a
business or trade, the particular act or transaction must then be tested by its
nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then
it is an act jure imperii, especially when it is not undertaken for gain or profit.”

The service contracts referred to by private respondent have not been intended
by the ADB for profit or gain but are official acts over which a waiver of immunity
would not attach.
G.R. No. L-68544 October 27, 1986

LORENZO C. DY, ZOSIMO DY, SR., WILLIAM IBERO, RICARDO GARCIA

AND RURAL BANK OF AYUNGON, INC., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION AND EXECUTIVE LABOR
ARBITER ALBERTO L. DALMACION, AND CARLITO H.
VAILOCES, respondents.

FACTS:

 Said private respondent, Carlito H. Vailoces, was the manager of the Rural
Bank of Ayungon (Negros Oriental), a banking institution duly organized
under Philippine laws. He was also a director and stockholder of the bank.
 On June 4, 1983, a special stockholders' meeting was called for the
purpose of electing the members of the bank's Board of Directors.
Immediately after the election the new Board proceeded to elect the bank's
executive officers.
 Pursuant to Article IV of the bank's by-laws, 2 providing for the election by
the entire membership of the Board of the executive officers of the bank,
i.e., the president, vice-president, secretary, cashier and bank manager,
in that board meeting of June 4, 1983, petitioners Lorenzo Dy, William
Ibero and Ricardo Garcia were elected president, vice-president and
corporate secretary, respectively. Vailoces was not re-elected as bank
manager, 3 Because of this development, the Board, on July 2, 1983,
passed Resolution No. 5, series of 1983, relieving him as bank manager.
 On August 3, 1983, Vailoces filed a complaint for illegal dismissal and
damages with the Ministry of Labor and Employment against Lorenzo Dy
and Zosimo Dy, Sr. The complaint was amended on September 22, 1983
to include additional respondents-William Ibero, Ricardo Garcia and the
Rural Bank of Ayungon, and additional causes of action for underpayment
of salary and non-payment of living allowance.
 The Executive Labor Arbiter found that Vailoces was:

(a) Illegally dismissed, first not because of absenteeism and

negligence, but of the resentment of petitioners against Vailoces
which arose from the latter's filing of the cases for recognition as
natural child against Zosimo Dy, Sr. and for violation of the
corporation code against Lorenzo Dy; and second, because he was
not afforded the due process of law when he was dismissed during
the Board meeting of July 2, 1983 the validity of which is seriously
doubted;

(b) Not paid his cost of living allowance; and

(c) Underpaid with only P500 monthly salary,

 Lorenzo Dy, et al. appealed to the NLRC, assigning error to the decision of
the Labor Arbiter on various grounds, among them: that Vailoces was not
entitled to notice of the Board meeting of July 2, 1983 which decreed his
relief because he was no longer a member of the Board on said date; that
he nonetheless had the opportunity to refute the charges against him and
seek a formal investigation because he received a copy of the minutes of
said meeting while he was still the bank manager (his removal was to take
effect only on August 15, 1983), instead of which he simply abandoned the
 work he was supposed to perform up to the effective date of his relief; and
that the matter of his relief was within the adjudicatory powers of the
Securities and Exchange Commission.7

HELD:

 There is no dispute that the position from which private respondent

Vailoces claims to have been illegally dismissed is an elective
corporate office. He himself acquired that position through election by
the bank's Board of Directors at the organizational meeting of November
17, 1979. 10 He lost that position because the Board that was elected in
the special stockholders' meeting of June 4, 1983 did not re-elect him. And
when Vailoces, in his position paper submitted to the Labor Arbiter,
impugned said stockholders' meeting as illegally convoked and the Board
of Directors thereby elected as illegally constituted, 11 he made it clear
that at the heart of the matter was the validity of the directors'
meeting of June 4, 1983 which, by not re-electing him to the position
of manager, in effect caused termination of his services.

 The case thus falls squarely within the purview of Section 5, par. (c), No.
902-A just cited. In PSBA vs. Leaño, 12 this Court, confronted with a
similar controversy, ruled that the Securities and Exchange Commission,
not the NLRC, has jurisdiction:

It was at a Board regular monthly meeting held on August 1, 1981,

that three directors were elected to fill vacancies. And, it was at the
regular Board meeting of September 5, 1981 that all corporate
positions were declared vacant in order to effect a reorganization,
and at the ensuing election of officers, Tan was not re-elected as
Executive Vice-President.

Basically, therefore, the question is whether the election of directors

on August 1, 1981 and the election of officers on September 5, 1981,
which resulted in Tan's failure to be re-elected, were validly held.
This is the crux of the question that Tan has raised before the SEC.
Even in his position paper before the NLRC, Tan alleged that the
election on August 1, 1981 of the three directors was in
contravention of the PSBA By-Laws providing that any vacancy in
the Board shall be filled by a majority vote of the stockholders at a
meeting specially called for the purpose. Thus, he concludes, the
Board meeting on September 5, 1981 was tainted with irregularity
on account of the presence of illegally elected directors without
whom the results could have been different.

Tan invoked the same allegations in his complaint filed with the
SEC. So much so, that on December 17, 1981, the SEC (Case No.
2145) rendered a Partial Decision annulling the election of the
three directors and ordered the convening of a stockholders'
meeting for the purpose of electing new members of the Board. The
correctness of d conclusion is not for us to pass upon in this case.
Tan was present at said meeting and again sought the issuance of
injunctive relief from the SEC.

The foregoing indubitably show that, fundamentally, the

controversy is intra-corporate in nature. It revolves around the
election of directors, officers or managers of the PSBA, the relation
between and among its stockholders, and between them and the
corporation. Private respondent also contends that his "ouster" was
a scheme to intimidate him into selling his shares and to deprive
him of his just and fair return on his investment as a stockholder
received through his salary and allowances as Executive Vice-
President. Vis-a-vis the NLRC, these matters fall within the
jurisdiction of the SEC. Presidential Decree No. 902-A vests in the
Securities and Exchange Commission:

... Original and exclusive jurisdiction to hear and decide cases

involving:

a) Devices or schemes employed by or any acts, of the board of

directors, business associates, its officers or partners, amounting
to fraud and misrepresentation) which may be detrimental to the
interest of the public and/or of the stockholders, partners,
members of associations or organizations registered with the
Commission.

b) Controversies arising out of intracorporate or partnership

relations, between and among stockholders, members or
associates; between any of 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 appointments of directors,

trustees, officers or managers of such corporations, partnership or
associations.

This is not a case of dismissal. The situation is that of

a corporate office having been declared vacant, and of Tan's not
having been elected thereafter. The matter of whom to elect is
a prerogative that belongs to the Board, and involves the
exercise of deliberate choice and the faculty of discriminative
selection. Generally speaking, the relationship of a person to
corporation, whether as officer or as agent or employee, is not
determined by the nature of the services performed, but by the
incidents of the relationship as they actually exist.
G.R. No. 118088 November 23, 1995

MAINLAND CONSTRUCTION, CO., INC., and/or LUCITA LU CARABUENA,

ROBERT L. CARABUENA, ELLEN LU CARABUENA, and MARTIN
LU, petitioners,
vs.
MILA MOVILLA, ERNESTO MOVILLA, JR., MILA JUDITH C. MOVILLA,
JUDE BRIX C. MOVILLA, JONARD ELLERY C. MOVILLA, AND MAILA
JONAH M. QUIMBO, surviving heirs of ERNESTO MOVILLA, and THE
HONORABLE COMMISSIONER of the NATIONAL LABOR RELATIONS
COMMISSION-5TH DIVISION, respondents.

FACTS:
 Mainland Construction Co., Inc. is a domestic corporation, duly organized
and existing under Philippine laws, having been issued a certificate of
registration by the SEC
 Its principal line... of business is the general construction of roads and
bridges and the operation of a service shop for the maintenance of
equipment. Respondents on the other hand, are the surviving heirs of
complainant, Ernesto Movilla, who died during the pendency of the action
with the Labor Arbiter.
 Records show that Ernesto Movilla, who was a Certified Public Accountant
during his lifetime, was hired as such by Mainland in 1977. Thereafter,
he was promoted to the position of Administrative Officer with a monthly
salary of P4,700.00.
 Ernesto Movilla, recorded as receiving a fixed salary of P4,700.00 a month,
was registered with the Social Security System (SSS) as an employee of
petitioner corporation. His contributions to the SSS, Medicare and
Employees Compensation Commission (ECC) were deducted from... his
monthly earnings by his said employer.
 On April 12, 1987, during petitioner corporation's annual meeting of
stockholders, the following were elected members of the Board of
Directors, viz: Robert L. Carabuena, Ellen L. Carabuena, Lucita Lu
Carabuena, Martin G. Lu and Ernesto L. Movilla.
 On the same day, an organizational meeting was held and the Board of
Directors elected Ernesto Movilla as Administrative Manager.[3] He
occupied the said position up to the time of his death.
 On April 2, 1991, the DOLE... conducted a routine inspection on petitioner
corporation and found that it committed such irregularities in the conduct
of its business as:
"1. Underpayment of wages under R.A. 6727 and RTWPB-XI-01;
2. Non-implementation of Wage Order No. RTWPB-XI-02;
3. Unpaid wages for 1989 and 1990;
4. Non-payment of holiday pay and service incentive leave pay; and
5. Unpaid 13th month pay (remaining balance for "1990."[4]
 On the basis of this finding, petitioner corporation was ordered by DOLE
to pay to its thirteen employees, which included Movilla, the total amount
of P309,435.89, representing their salaries, holiday pay, service incentive
leave pay differentials, unpaid wages and 13th month... pay.
  All the employees listed in the DOLE's order were paid by petitioner
corporation, except Ernesto Movilla.
 On October 8, 1991, Ernesto Movilla filed a case against petitioner
corporation and/or Lucita, Robert, and Ellen, all surnamed Carabuena,
for unpaid wages, separation pay and attorney's fees, with the Department
of Labor and Employment, Regional Arbitration, Branch XI, Davao City.
 On February 29, 1992, Ernesto Movilla died while the case was being tried
by the Labor Arbiter and was promptly substituted by his heirs, private
respondents herein, with the consent of the Labor Arbiter.
 The Labor Arbiter rendered judgment on June 26, 1992, dismissing the
complaint on the ground of lack of jurisdiction. Specifically, the Labor
Arbiter made the following ratiocination:
"It is clear that in the case at bar, the controversy presented by complainant is
intra-corporate in nature and is within the jurisdiction of the Securities and
Exchange Commission, pursuant to P.D. 902-A (Phil. School of Business
Administration, et al. v. Leano,... G.R. No. L-58468, February 24, 1984; Dy et al.
v. NLRC, et al., G.R. No. L-68544, October 27, 1986). What Movilla is claiming
against respondents are his alleged unpaid salaries and separation pay as
Administrative Manager of the corporation for which position he was... appointed
by the Board of Directors. His claims therefore fall under the jurisdiction of the
Securities and Exchange Commission because this 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. (Fortune Cement Corporation v. NLRC, et al., G.R No. 79762, January 24,
1991)."[5]
 Aggrieved by this decision, respondents appealed to the National Labor
Relations Commission (NLRC). The NLRC ruled that the issue in the case
was one which involved a labor dispute between an employee and
petitioner corporation and, thus, the NLRC had jurisdiction to... resolve
the case.
Issues:
Who has jurisdiction - NLRC or the SEC
HELD:

We find for the respondents, it appearing that petitioners' contention is bereft

of merit.

 In order that the SEC can 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; c) between the corporation, partnership or association and the
State as far as its franchise, permit or license to operate is concerned; and
d) among the stockholders, partners or associates themselves.7 The fact
that the parties involved in the controversy are all stockholders or that the
parties involved are the stockholders and the corporation does not
necessarily place the dispute within the ambit of the jurisdiction of SEC.
The better policy to be followed in determining jurisdiction over a
case should be to consider concurrent factors such as the status or
relationship of the parties or the nature of the question that is the
subject of their controversy.8 In the absence of any one of these
factors, the SEC will not have jurisdiction. Furthermore, it does not
necessarily follow that every conflict between the corporation and its
 stockholders would involve such corporate matters as only the SEC
can resolve in the exercise of its adjudicatory or quasi-
judicial powers.9

 In the case at bench, the claim for unpaid wages and separation pay
filed by the complainant against petitioner corporation involves a
labor dispute. It does not involve an intra-corporate matter, even when it
is between a stockholder and a corporation. It relates to an employer-
employee relationship which is distinct from the corporate
relationship of one with the other. Moreover, there was no showing of
any change in the duties being performed by complainant as an
Administrative Officer and as an Administrative Manager after his
election by the Board of Directors. What comes to the fore is whether
there was a change in the nature of his functions and not merely the
nomenclature or title given to his job.

 Indeed, Ernesto Movilla worked as an administrative officer of the

company for several years and was given a fixed salary every month.
To further sustain this assertion Movilla also submitted a joint affidavit
executed by Juanito S. Malubay and Delia S. Luciano, Project Engineer
and Personnel-In-Charge, respectively, of petitioner corporation, attesting
that they personally knew Movilla and that he was employed in the
company. A Premium Certification issued by an authorized representative
of petitioners was also presented to show his actual monthly earnings as
well as his monthly contributions to the SSS, Medicare and
ECC.10 Movilla's registration in the SSS by petitioner corporation added
strength to the conclusion that he was petitioner corporation's employee
as coverage by the said law is predicated on the existence of an employer-
employee relationship. 11 Furthermore, petitioner corporation failed to
present evidence which showed that, after his election as Administrative
Manager, he was excluded from the coverage of the SSS, Medicare and
ECC.
 He also presented, appearing to be relevant to the issue, the result of the
investigation conducted by DOLE which found that petitioner corporation
has transgressed several labor standard laws against its employees.

As correctly ruled by the NLRC:

The claims for unpaid salaries/monetary benefits and separation

pay, are not a corporate conflict as respondents presented them to
be. If complainant is not an employee, respondent should have
contested the DOLE inspection report, What they did was to exclude
complainant from the order of payment . . . and worse, he was not
both given responsibilities and paid his salaries for the succeeding
months . . . . This is a clear case of constructive dismissal without
due process . . .12

 The existence of an employer-employee relationship is a factual question

and public respondent's findings are accorded great weight and respect as
the same are supported by substantial evidence.13 Hence, we uphold the
conclusion of public respondent that Ernesto Movilla was an employee of
petitioner corporation.
[G.R. No. 121143. January 21, 1997.]

PURIFICACION G. TABANG, Petitioner, v. NATIONAL LABOR RELATIONS

COMMISSION and PAMANA GOLDEN CARE MEDICAL CENTER
FOUNDATION, INC., Respondents.

FACTS:

 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 respondent’s 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.
 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.

ISSUE:

WON the NLRC has Jurisdiction

HELD:

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 intra-corporate 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 "(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
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

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 chanroblesvirtuallawlibrary

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

employee, was appointed by respondent corporation’s 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.

A corporate officer’s 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.

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. v. 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
remuneration 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., v. 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.’"chanroblesvirtuallawlibrary:red
G.R. No. 157802 October 13, 2010

MATLING INDUSTRIAL AND COMMERCIAL CORPORATION, RICHARD K.

SPENCER, CATHERINE SPENCER, AND ALEX MANCILLA, Petitioners,
vs.
RICARDO R. COROS, Respondent.

DECISION

FACTS:

 After his dismissal by Matling as its Vice President for Finance and
Administration, the respondent filed on August 10, 2000 a complaint for
illegal suspension and illegal dismissal against Matling and some of its
corporate officers (petitioners) in the NLRC, Sub-Regional Arbitration
Branch XII, Iligan City.3
 The petitioners moved to dismiss the complaint,4 raising the ground,
among others, that the complaint pertained to the jurisdiction of the
Securities and Exchange Commission (SEC) due to the controversy being
intra-corporate inasmuch as the respondent was a member of Matling’s
Board of Directors aside from being its Vice-President for Finance and
Administration prior to his termination.
 The respondent opposed the petitioners’ motion to dismiss,5 insisting that
his status as a member of Matling’s Board of Directors was doubtful,
considering that he had not been formally elected as such; that he did not
own a single share of stock in Matling, considering that he had been made
to sign in blank an undated indorsement of the certificate of stock he had
been given in 1992; that Matling had taken back and retained the
certificate of stock in its custody; and that even assuming that he had been
a Director of Matling, he had been removed as the Vice President for
Finance and Administration, not as a Director, a fact that the notice of his
termination dated April 10, 2000 showed.

Issue

Wwhether the respondent was a corporate officer of Matling or not. The

resolution of the issue determines whether the LA or the RTC had jurisdiction
over his complaint for illegal dismissal.

Ruling

The appeal fails.

The Law on Jurisdiction in Dismissal Cases

As a rule, the illegal dismissal of an officer or other employee of a private

employer is properly cognizable by the LA. This is pursuant to Article 217 (a) 2
of the Labor Code, as amended, which provides as follows:

Article 217. Jurisdiction of the Labor Arbiters and the Commission. - (a) Except
as otherwise provided under this Code, the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decide, within thirty (30) calendar days
after the submission of the case by the parties for decision without extension,
even in the absence of stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that

workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages

arising from the employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code,

including questions involving the legality of strikes and lockouts;
and

6. Except claims for Employees Compensation, Social Security,

Medicare and maternity benefits, all other claims arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding five
thousand pesos (₱5,000.00) regardless of whether accompanied
with a claim for reinstatement.

(b) The Commission shall have exclusive appellate jurisdiction over all
cases decided by Labor Arbiters.

(c) Cases arising from the interpretation or implementation of collective

bargaining agreements and those arising from the interpretation or
enforcement of company personnel policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitration as may be provided in said agreements. (As
amended by Section 9, Republic Act No. 6715, March 21, 1989).

Where the complaint for illegal dismissal concerns a corporate officer, however,
the controversy falls under the jurisdiction of the Securities and Exchange
Commission (SEC), because the controversy arises out of intra-corporate or
partnership relations between and among stockholders, members, or associates,
or between any or all of them and the corporation, partnership, or association of
which they are stockholders, members, or associates, respectively; and between
such corporation, partnership, or association and the State insofar as the
controversy concerns their individual franchise or right to exist as such entity;
or because the controversy involves the election or appointment of a director,
trustee, officer, or manager of such corporation, partnership, or
association.14 Such controversy, among others, is known as an intra-corporate
dispute.

Effective on August 8, 2000, upon the passage of Republic Act No.

8799,15 otherwise known as The Securities Regulation Code, the SEC’s
jurisdiction over all intra-corporate disputes was transferred to the RTC,
pursuant to Section 5.2 of RA No. 8799, to wit:

5.2. The Commission’s jurisdiction over all cases enumerated under Section 5
of Presidential Decree No. 902-A is hereby transferred to the Courts of general
jurisdiction or the appropriate Regional Trial Court: Provided, that the Supreme
Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases. The Commission
shall retain jurisdiction over pending cases involving intra-corporate disputes
submitted for final resolution which should be resolved within one (1) year from
the enactment of this Code. The Commission shall retain jurisdiction over
pending suspension of payments/rehabilitation cases filed as of 30 June 2000
until finally disposed.

Considering that the respondent’s complaint for illegal dismissal was

commenced on August 10, 2000, it might come under the coverage of Section
5.2 of RA No. 8799, supra, should it turn out that the respondent was a
corporate, not a regular, officer of Matling.

II

Was the Respondent’s Position of Vice President

for Administration and Finance a Corporate Office?

We must first resolve whether or not the respondent’s position as Vice President
for Finance and Administration was a corporate office. If it was, his dismissal by
the Board of Directors rendered the matter an intra-corporate dispute cognizable
by the RTC pursuant to RA No. 8799.

The petitioners contend that the position of Vice President for Finance and
Administration was a corporate office, having been created by Matling’s President
pursuant to By-Law No. V.

The petitioners argue that the power to create corporate offices and to appoint
the individuals to assume the offices was delegated by Matling’s Board of
Directors to its President through By-Law No. V, as amended; and that any office
the President created, like the position of the respondent, was as valid and
effective a creation as that made by the Board of Directors, making the office a
corporate office. In justification, they cite Tabang v. National Labor Relations
Commission,17 which held that "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 officers as may be
necessary."

The respondent counters that Matling’s By-Laws did not list his position as Vice
President for Finance and Administration as one of the corporate offices; that
Matling’s By-Law No. III listed only four corporate officers, namely: President,
Executive Vice President, Secretary, and Treasurer; 18 that the corporate offices
contemplated in the phrase "and such other officers as may be provided for in
the by-laws" found in Section 25 of the Corporation Code should be clearly and
expressly stated in the By-Laws; that the fact that Matling’s By-Law No. III dealt
with Directors & Officers while its By-Law No. V dealt with Officers proved that
there was a differentiation between the officers mentioned in the two provisions,
with those classified under By-Law No. V being ordinary or non-corporate
officers; and that the officer, to be considered as a corporate officer, must be
elected by the Board of Directors or the stockholders, for the President could
only appoint an employee to a position pursuant to By-Law No. V.

We agree with respondent.

Section 25 of the Corporation Code provides:

Section 25. Corporate officers, quorum.--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. Any two (2) or more positions may be
held concurrently by the same person, except that no one shall act as president
and secretary or as president and treasurer at the same time.

The directors or trustees and officers to be elected shall perform the duties
enjoined on them by law and the by-laws of the corporation. Unless the articles
of incorporation or the by-laws provide for a greater majority, a majority of the
number of directors or trustees as fixed in the articles of incorporation shall
constitute a quorum for the transaction of corporate business, and every
decision of at least a majority of the directors or trustees present at a meeting at
which there is a quorum shall be valid as a corporate act, except for the election
of officers which shall require the vote of a majority of all the members of the
board.

Directors or trustees cannot attend or vote by proxy at board meetings.

Conformably with Section 25, a position must be expressly mentioned in

the By-Laws in order to be considered as a corporate office. Thus, the
creation of an office pursuant to or under a By-Law enabling provision is
not enough to make a position a corporate office. Guerrea v. Lezama,19 the
first ruling on the matter, held that the only officers of a corporation were
those given that character either by the Corporation Code or by the By-
Laws; the rest of the corporate officers could be considered only as
employees or subordinate officials.

 It is relevant to state in this connection that the SEC, the primary agency
administering the Corporation Code, adopted a similar interpretation of
Section 25 of the Corporation Code in its Opinion dated November 25,
1993,21 to wit:

Thus, pursuant to the above provision (Section 25 of the Corporation Code),

whoever are the corporate officers enumerated in the by-laws are the exclusive
Officers of the corporation and the Board has no power to create other Offices
without amending first the corporate By-laws. However, the Board may create
appointive positions other than the positions of corporate Officers, but the
persons occupying such positions are not considered as corporate officers
within the meaning of Section 25 of the Corporation Code and are not
empowered to exercise the functions of the corporate Officers, except those
functions lawfully delegated to them. Their functions and duties are to be
determined by the Board of Directors/Trustees.

Moreover, the Board of Directors of Matling could not validly delegate the power
to create a corporate office to the President, in light of Section 25 of the
Corporation Code requiring the Board of Directors itself to elect the corporate
officers. Verily, the power to elect the corporate officers was a discretionary power
that the law exclusively vested in the Board of Directors, and could not be
delegated to subordinate officers or agents.22 The office of Vice President for
Finance and Administration created by Matling’s President pursuant to By Law
No. V was an ordinary, not a corporate, office.

To emphasize, the power to create new offices and the power to appoint the
officers to occupy them vested by By-Law No. V merely allowed Matling’s
President to create non-corporate offices to be occupied by ordinary employees
of Matling. Such powers were incidental to the President’s duties as the executive
head of Matling to assist him in the daily operations of the business.

The petitioners’ reliance on Tabang, supra, is misplaced. The statement

in Tabang, to the effect that offices not expressly mentioned in the By-Laws but
were created pursuant to a By-Law enabling provision were also considered
corporate offices, was plainly obiter dictum due to the position subject of the
controversy being mentioned in the By-Laws. Thus, the Court held therein that
the position was a corporate office, and that the determination of the rights and
liabilities arising from the ouster from the position was an intra-corporate
controversy within the SEC’s jurisdiction.

In Nacpil v. Intercontinental Broadcasting Corporation,23 which may be the more

appropriate ruling, the position subject of the controversy was not expressly
mentioned in the By-Laws, but was created pursuant to a By-Law enabling
provision authorizing the Board of Directors to create other offices that the Board
of Directors might see fit to create. The Court held there that the position was a
corporate office, relying on the obiter dictum in Tabang.

Considering that the observations earlier made herein show that the soundness
of their dicta is not unassailable, Tabang and Nacpil should no longer be
controlling.

III

Did Respondent’s Status as Director and

Stockholder Automatically Convert his Dismissal
into an Intra-Corporate Dispute?

Yet, the petitioners insist that because the respondent was a

Director/stockholder of Matling, and relying on Paguio v. National Labor
Relations Commission24 and Ongkingko v. National Labor Relations
Commission,25 the NLRC had no jurisdiction over his complaint, considering that
any case for illegal dismissal brought by a stockholder/officer against the
corporation was an intra-corporate matter that must fall under the jurisdiction
of the SEC conformably with the context of PD No. 902-A.

The petitioners’ insistence is bereft of basis.

To begin with, the reliance on Paguio and Ongkingko is misplaced. In both

rulings, the complainants were undeniably corporate officers due to their
positions being expressly mentioned in the By-Laws, aside from the fact that
both of them had been duly elected by the respective Boards of Directors. But
the herein respondent’s position of Vice President for Finance and
Administration was not expressly mentioned in the By-Laws; neither was
the position of Vice President for Finance and Administration created by
Matling’s Board of Directors. Lastly, the President, not the Board of
Directors, appointed him.

True it is that the Court pronounced in Tabang as follows:

Also, an intra-corporate controversy is one which arises between a stockholder

and the corporation. There is no distinction, qualification or any exemption
whatsoever. The provision is broad and covers all kinds of controversies between
stockholders and corporations.26
However, the Tabang pronouncement is not controlling because it is too
sweeping and does not accord with reason, justice, and fair play. In order to
determine whether a dispute constitutes an intra-corporate controversy or not,
the Court considers two elements instead, namely: (a) the status or relationship
of the parties; and (b) the nature of the question that is the subject of their
controversy. This was our thrust in Viray v. Court of Appeals:27

The establishment of any of the relationships mentioned above will not

necessarily always confer jurisdiction over the dispute on the SEC to the
exclusion of regular courts. The statement made in one case that the rule admits
of no exceptions or distinctions is not that absolute. The better policy in
determining which body has jurisdiction over a case would be to consider not
only the status or relationship of the parties but also the nature of the question
that is the subject of their controversy.

Not every conflict between a corporation and its stockholders involves corporate
matters that only the SEC can resolve in the exercise of its adjudicatory or quasi-
judicial powers. If, for example, a person leases an apartment owned by a
corporation of which he is a stockholder, there should be no question that a
complaint for his ejectment for non-payment of rentals would still come under
the jurisdiction of the regular courts and not of the SEC. By the same token, if
one person injures another in a vehicular accident, the complaint for damages
filed by the victim will not come under the jurisdiction of the SEC simply because
of the happenstance that both parties are stockholders of the same corporation.
A contrary interpretation would dissipate the powers of the regular courts and
distort the meaning and intent of PD No. 902-A.

The fact that the parties involved in the controversy are all stockholders or that
the parties involved are the stockholders and the corporation does not
necessarily place the dispute within the ambit of the jurisdiction of SEC. The
better policy to be followed in determining jurisdiction over a case should be to
consider concurrent factors such as the status or relationship of the parties or
the nature of the question that is the subject of their controversy. In the absence
of any one of these factors, the SEC will not have jurisdiction. Furthermore, it
does not necessarily follow that every conflict between the corporation and its
stockholders would involve such corporate matters as only the SEC can resolve
in the exercise of its adjudicatory or quasi-judicial powers.29

The criteria for distinguishing between corporate officers who may be ousted
from office at will, on one hand, and ordinary corporate employees who may only
be terminated for just cause, on the other hand, do not depend on the nature of
the services performed, but on the manner of creation of the office. In the
respondent’s case, he was supposedly at once an employee, a stockholder, and
a Director of Matling. The circumstances surrounding his appointment to office
must be fully considered to determine whether the dismissal constituted an
intra-corporate controversy or a labor termination dispute. We must also
consider whether his status as Director and stockholder had any relation at all
to his appointment and subsequent dismissal as Vice President for Finance and
Administration.

Obviously enough, the respondent was not appointed as Vice President for
Finance and Administration because of his being a stockholder or Director of
Matling. He had started working for Matling on September 8, 1966, and had been
employed continuously for 33 years until his termination on April 17, 2000, first
as a bookkeeper, and his climb in 1987 to his last position as Vice President for
Finance and Administration had been gradual but steady.
G.R. No. 201298 February 5, 2014

RAUL C. COSARE, Petitioner,

vs.
BROADCOM ASIA, INC. and DANTE AREVALO, Respondents.

DECISION

FACTS:

In 1993, Cosare was employed as a salesman by Arevalo, who was then in the
business of selling broadcast equipment needed by television networks and
production houses. In December 2000, Arevalo set up the company Broadcom,
still to continue the business of trading communication and broadcast
equipment. Cosare was named an incorporator of Broadcom, having been
assigned 100 shares of stock with par value of P1.00 per share. In October 2001,
Cosare was promoted to the position of Assistant Vice President for Sales (AVP
for Sales) and Head of the Technical Coordination.

Sometime in 2003, Alex F. Abiog (Abiog) was appointed as Broadcoms Vice

President for Sales and thus, became Cosares immediate superior. Cosare sent
a confidential memo to Arevalo to inform him of the anomalies which were
allegedly being committed by Abiog against the company. Cosare ended his
memo by clarifying that he was not interested in Abiogs position, but only wanted
Arevalo to know of the irregularities for the corporations sake.

Apparently, Arevalo failed to act on Cosares accusations. Cosare claimed that he

was instead called for a meeting by Arevalo on March 25, 2009, wherein he was
asked to tender his resignation in exchange for "financial assistance" in the
amount ofP300,000.00.Cosare refused to comply with the directive, as signified
in a letter which he sent to Arevalo.

Cosare received from Roselyn Villareal (Villareal), Broadcoms Manager for

Finance and Administration, a memosigned by Arevalo, charging him of serious
misconduct and willful breach of trust. He was given forty-eight (48) hours from
the date of the memo within which to present his explanation on the charges. He
was also "suspended from having access to any and all company files/records
and use of company assets effective immediately."Thus, Cosare claimed that he
was precluded from reporting for work and was instead instructed to wait at the
offices receiving section. Upon the specific instructions of Arevalo, he was also
prevented by Villareal from retrieving even his personal belongings from the office
until he was totally barred from entering the company premises.

Cosare filed a labor complaint, claiming that he was constructively dismissed

from employment by the respondents. He further argued that he was illegally
suspended, as he placed no serious and imminent threat to the life or property
of his employer and co-employees.

In refuting Cosares complaint, the respondents argued that Cosare was neither
illegally suspended nor dismissed from employment. They also contended that
Cosare committed the following acts inimical to the interests of
Broadcom.Furthermore, they contended that Cosare abandoned his job by
continually failing to report for work beginning April 1, 2009, prompting them to
issue on April 14, 2009 a memorandumaccusing Cosare of absence without leave
beginning April 1, 2009.
The Labor Arbiter dismissed the complaint on the ground of Cosares failure to
establish that he was constructively dismissed.

Cosare appealed the LA decision to the NLRC. It reversed the LA decision.

The respondents motion for reconsideration was denied.Dissatisfied, they filed a

petition for certiorari with the CA on the issues of constructive dismissal and
intra-corporate controversy which was within the jurisdiction of the RTC, instead
of the LA. They argued that the case involved a complaint against a corporation
filed by a stockholder, who, at the same time, was a corporate officer.

The CAgranted the respondents petition. It agreed with the respondents

contention that the case involved an intra-corporate controversy which,
pursuant to Presidential Decree No. 902-A, as amended, was within the exclusive
jurisdiction of the RTC. Hence, this petition filed by Cosare.

ISSUE:

The pivotal issues for the petition’s full resolution are as follows: (1) whether or
not the case instituted by Cosare was an intra-corporate dispute that was within
the original jurisdiction of the RTC, and not of the LAs;

RULING:

Jurisdiction over the controversy

 As regards the issue of jurisdiction, the Court has determined that

contrary to the ruling of the CA, it is the LA, and not the regular courts,
which has the original jurisdiction over the subject controversy. An
intra-corporate controversy, which falls within the jurisdiction of regular
courts, has been regarded in its broad sense to pertain to disputes that
involve any of the following relationships: (1) between the corporation,
partnership or association and the public; (2) between the corporation,
partnership or association and the state in so far as its franchise, permit
or license to operate is concerned; (3) between the corporation, partnership
or association and its stockholders, partners, members or officers; and (4)
among the stockholders, partners or associates, themselves.29 Settled
jurisprudence, however, qualifies that when the dispute involves a charge
of illegal dismissal, the action may fall under the jurisdiction of the LAs
upon whose jurisdiction, as a rule, falls termination disputes and claims
for damages arising from employer-employee relations as provided in
Article 217 of the Labor Code. Consistent with this jurisprudence, the mere
fact that Cosare was a stockholder and an officer of Broadcom at the time
the subject controversy developed failed to necessarily make the case an
intra-corporate dispute.

In Matling Industrial and Commercial Corporation v. Coros,30 the Court

distinguished between a "regular employee" and a "corporate officer" for purposes
of establishing the true nature of a dispute or complaint for illegal dismissal and
determining which body has jurisdiction over it. Succinctly, it was explained that
"[t]he determination of whether the dismissed officer was a regular employee or
corporate officer unravels the conundrum" of whether a complaint for illegal
dismissal is cognizable by the LA or by the RTC. "In case of the regular
employee, the LA has jurisdiction; otherwise, the RTC exercises the legal
authority to adjudicate.31
Applying the foregoing to the present case, the LA had the original jurisdiction
over the complaint for illegal dismissal because Cosare, although an officer of
Broadcom for being its AVP for Sales, was not a "corporate officer" as the term is
defined by law. We emphasized in Real v. Sangu Philippines, Inc.32 the definition
of corporate officers for the purpose of identifying an intra-corporate controversy.
Citing Garcia v. Eastern Telecommunications Philippines, Inc.,33 we held:

" ‘Corporate officers’ in the context of Presidential Decree No. 902-A are those
officers of the corporation who are given that character by the Corporation
Code or by the corporation’s by-laws. There are three specific officers whom a
corporation must have under Section 25 of the Corporation Code. These are the
president, secretary and the treasurer. The number of officers is not limited to
these three. A corporation may have such other officers as may be provided for
by its by-laws like, but not limited to, the vice-president, cashier, auditor or
general manager. The number of corporate officers is thus limited by law and
by the corporation’s by-laws."34 (Emphasis ours)

In Tabang v. NLRC,35 the Court also made the following pronouncement on the
nature of corporate offices:

It has been held that an "office" is created by the charter of the corporation and
the officer is elected by the directors and stockholders. 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.36 (Citations omitted)

As may be deduced from the foregoing, there are two circumstances which must
concur in order for an individual to be considered a corporate officer, as against
an ordinary employee or officer, namely: (1) the creation of the position is under
the corporation’s charter or by-laws; and (2) the election of the officer is by the
directors or stockholders. It is only when the officer claiming to have been
illegally dismissed is classified as such corporate officer that the issue is deemed
an intra-corporate dispute which falls within the jurisdiction of the trial courts.

To support their argument that Cosare was a corporate officer, the respondents
referred to Section 1, Article IV of Broadcom’s by-laws.

The Court disagrees with the respondents and the CA. As may be gleaned from
the aforequoted provision, the only officers who are specifically listed, and thus
with offices that are created under Broadcom’s by-laws are the following: the
President, Vice-President, Treasurer and Secretary. Although a blanket authority
provides for the Board’s appointment of such other officers as it may deem
necessary and proper, the respondents failed to sufficiently establish that the
position of AVP for Sales was created by virtue of an act of Broadcom’s board,
and that Cosare was specifically elected or appointed to such position by the
directors. No board resolutions to establish such facts form part of the case
records. Further, it was held in Marc II Marketing, Inc. v. Joson38 that an
enabling clause in a corporation’s by-laws empowering its board of directors to
create additional officers, even with the subsequent passage of a board resolution
to that effect, cannot make such position a corporate office. The board of
directors has no power to create other corporate offices without first amending
the corporate by-laws so as to include therein the newly created corporate
office.39 "To allow the creation of a corporate officer position by a simple inclusion
in the corporate by-laws of an enabling clause empowering the board of directors
to do so can result in the circumvention of that constitutionally well-protected
right [of every employee to security of tenure]."40

The CA’s heavy reliance on the contents of the General Information Sheets41,
which were submitted by the respondents during the appeal proceedings and
which plainly provided that Cosare was an "officer" of Broadcom, was clearly
misplaced. The said documents could neither govern nor establish the nature of
the office held by Cosare and his appointment thereto. Furthermore, although
Cosare could indeed be classified as an officer as provided in the General
Information Sheets, his position could only be deemed a regular office, and not
a corporate office as it is defined under the Corporation Code. Incidentally, the
Court noticed that although the Corporate Secretary of Broadcom, Atty. Efren L.
Cordero, declared under oath the truth of the matters set forth in the General
Information Sheets, the respondents failed to explain why the General
Information Sheet officially filed with the Securities and Exchange Commission
in 2011 and submitted to the CA by the respondents still indicated Cosare as an
AVP for Sales, when among their defenses in the charge of illegal dismissal, they
asserted that Cosare had severed his relationship with the corporation since the
year 2009.

Finally, the mere fact that Cosare was a stockholder of Broadcom at the time of
the case’s filing did not necessarily make the action an intra- corporate
controversy. "Not all conflicts between the stockholders and the corporation are
classified as intra-corporate. There are other facts to consider in determining
whether the dispute involves corporate matters as to consider them as intra-
corporate controversies."42 Time and again, the Court has ruled that in
determining the existence of an intra-corporate dispute, the status or
relationship of the parties and the nature of the question that is the subject of
the controversy must be taken into account.43 Considering that the pending
dispute particularly relates to Cosare’s rights and obligations as a regular
officer of Broadcom, instead of as a stockholder of the corporation, the
controversy cannot be deemed intra-corporate. This is consistent with the
"controversy test" explained by the Court in Reyes v. Hon. RTC, Br. 142,44 to wit:

Under the nature of the controversy test, the incidents of that relationship
must also be considered for the purpose of ascertaining whether the
controversy itself is intra-corporate. The controversy must not only be
rooted in the existence of an intra-corporate relationship, but must as well
pertain to the enforcement of the parties’ correlative rights and obligations
under the Corporation Code and the internal and intra-corporate regulatory
rules of the corporation. If the relationship and its incidents are merely
incidental to the controversy or if there will still be conflict even if the
relationship does not exist, then no intra-corporate controversy
exists.45 (Citation omitted)
 G.R. No. 178762 : June 16, 2010

LUZVIMINDA A. ANG, Petitioner, v. PHILIPPINE NATIONAL

BANK, Respondent.

DECISION

ABAD, J.:

In her Position Paper, petitioner Luzviminda A. Ang (Ang) claimed that

respondent Philippine National Bank (PNB), then a government-owned
corporation, hired her on December 4, 1967 as a probationary clerk. But she
rose from the ranks, eventually becoming an Assistant Department Manager I, a
position she held when the PNB was privatized on May 26, 1996 and when she,
like her co-employees, was deemed automatically retired. The bank computed
Angs gratuity benefits, the monetary value of her leave credits, and the other
benefits due her and cleared her of any accountability.

But the PNB re-employed Ang as Assistant Manager effective on May 27, 1996
and assigned her in its Tuguegarao, Cagayan Branch. Less than four months
later, however, or on September 3, 1996 the PNB administratively charged her
with serious misconduct and willful breach of trust for taking part in a scam,
called kiting operation, where a depositor used a conduit bank account for
depositing several unfunded checks drawn against the same depositors other
current accounts and from which conduit bank account he later withdrew those
checks. The PNB alleged that Ang had allowed this illegal activity from January
2 to April 3, 1996 while she was the Assistant Department Manager I in its
Tuguegarao Branch.

On September 16, 1996 the PNB heaped other charges against Ang of serious
misconduct and gross violation of the banks rules and regulations.

In answer to the first charge, Ang claimed that it was not a kiting operation, but
an accommodation of a very valued client.She admitted that the checks were not
funded and were converted into account receivables or accommodation loans
that the client had settled, including interests, penalties, and other charges.
Consequently, the PNB did not suffer any loss from those transactions; it even
reaped enormous profits from them.

On the second charge, Ang claimed that the issuance of the certificates had been
tolerated to accommodate valued clients as a marketing strategy and prevent
their move to other banks. These had been open transactions, said Ang, which
were known to all the officers of the branch. Again, the PNB did not suffer any
loss on account of the issuance of those certificates. The clients involved
maintained their loyalty to the bank.

On the third charge, Ang claimed that the PNBs loan commitments in those cases
amounted to mere recommendations since she had no authority to approve
loans. Furthermore, she could not have violated SEL Cir. 2-166/91 dated July
10, 1996 since this was not yet in effect when she issued those commitments on
January 24, 1994. Besides, the circular merely prescribed the fees to be
collected.
On the last charge, Ang claimed that she was not covered by the circular
governing office hours because she was a bank officer. Managerial employees,
according to her, worked beyond the usual eight hours and even worked on
Saturdays and Sundays.She added that, since the bank had already made
deductions for tardiness on her pay check, she cannot anymore be
administratively charged for it.

Ang further pointed out that the causes for her termination took place when she
was yet a government official. The PNB had since ceased to be government-
owned. If she were to be charged for those causes, the jurisdiction over her case
would lie with the Civil Service Commission. Even then, since she already retired
from the government service, the employment that could be terminated no longer
existed.

Pending administrative investigation, the PNB assigned Ang to its Aparri Branch
on April 3, 1997. Its Inspection and Investigation Unit recommended her
dismissal on June 3, 1997 to the Board of Inquiry. Ang alleged that the PNB
dismissed her from work on July 25, 1997, withholding her fringe benefits,
gratuity benefits, monetary value of her leave credits, rights and interests in the
provident fund, and other benefits due her as of May 26, 1996. She sought
reconsideration, but the bank denied it.

On January 27, 1998 Ang filed a complaint against the PNB before the National
Labor Relations Commission (NLRC), Regional Arbitration Branch II,
Tuguegarao, Cagayan in NLRC RAB II CN 01-00022-98 for illegal dismissal,
illegal deductions, non-payment of 13th month pay, allowances, separation pay,
and retirement benefits with prayer for payment of moral and exemplary
damages, attorneys fees, and litigation expenses.

On March 30, 1999 the Labor Arbiter (LA) rendered a Decision, finding the PNBs
dismissal of Ang illegal for failure to show that the dismissal was for a valid cause
and after notice and hearing. Specifically, the PNB failed to prove any basis for
loss of trust.

The PNB appealed the decision to the NLRC but the latter dismissed the appeal
on January 30, 2004. Upon motion for reconsideration, however, or on October
29, 2004 the NLRC reconsidered its finding of lack of due process, considering
Angs admission during direct examination that the PNB informed her of the
charges against her and gave her a chance to present her side with the assistance
of a counsel. The NLRC deleted the award of damages because of absence of bad
faith on the part of the PNB officers but maintained the LAs finding that the PNB
had not proved loss of trust as a ground for dismissal.

On petition for certiorari with the Court of Appeals (CA), the latter rendered a
decision on January 30, 2007, finding valid reason to uphold Angs dismissal
from the service for willful breach of the trust reposed in her by the PNB.

ISSUE:

HELD:

Although the transformation of the PNB from a government-owned corporation

to a private one did not result in a break in its life as ju Automatic Termination
of Employer-Employee Relations ridical person, the same idea of continuity
cannot be said of its employees. Section 27 of Presidential Proclamation 50
provided for the automatic termination of employer-employee relationship upon
privatization of a government-owned and controlled corporation. Further, such
privatization cannot deprive the government employees involved of their accrued
benefits or compensation. Thus:

Sec. 27. Automatic Termination of Employer-Employee Relations. Upon the sale

or other disposition of the ownership and/or controlling interest of the
government in a corporation held by the Trust, or all or substantially all of the
assets of such corporation, the employer-employee relations between the
government and the officers and other personnel of such corporations shall
terminate by operation of law. None of such officers or employees shall retain
any vested right to future employment in the privatized or disposed corporation,
and the new owners or controlling interest holders thereof shall have full and
absolute discretion to retain or dismiss said officers and employees and to hire
the replacement or replacements of any one or all of them as the pleasure and
confidence of such owners or controlling interest holders may dictate.

Nothing in this section shall, however, be construed to deprive said officers and
employees of their vested entitlements in accrued benefits or the compensation
and other benefits incident to their employment or attaching to termination
under applicable employment contracts, collective bargaining agreements, and
applicable legislation.

Here, when PNB was privatized, Angs employment with it as a government-

owned corporation ceased. Indeed, the PNB already computed the retirement and
other benefits to which she was entitled as a result of the cessation of her
employment. Since she had no pending administrative case on the day she
ceased to be a PNB employee and had been cleared of any accountability, all
those benefits already accrued to her on the date of her termination.

Of course, the PNB rehired her immediately but that is another story. In the eyes
of the law, her record as employee of the government-owned PNB was
untarnished at the time of her separation from it. In fact, the PNB already
computed the benefits to which she was entitled and readied their payment. The
GSIS rule that the PNB now relies on applied only to employees with pending
administrative charge at the time of their retirement. Since Ang had none of that,
the cited rule did not apply to her. The Court sees no reason why she should not
receive the benefits which she earned or which accrued to her as of May 26,
1996.

As for possible benefits accruing to Ang after May 26, 1996, the same should be
deemed governed by the Labor Code since the PNB that rehired her on May 27,
1996 has become a private corporation. Under the Omnibus Rules Implementing
the Labor Code, Book VI, Rule I, Section 7, the employees separation from work
for a just cause does not entitle her to termination pay.Thus, the PNB may
rightfully withhold Angs termination pay that accrued beginning on May 27,
1996 because of her dismissal.
 G.R. No. 121227. August 17, 1998

VICENTE SAN JOSE, Petitioner, v. NATIONAL LABOR RELATIONS

COMMISSION and OCEAN TERMINAL SERVICES, INC., Respondents.

DECISION

PURISIMA, J.:

FACTS:

Before the Court is a Petition for Certiorari seeking to annul a Decision of the
National Labor Relations Commission dated April 20, 1995 in NLRC-NCR-CA-
No. 00671-94 which reversed, on jurisdictional ground, a Decision of the Labor
Arbiter dated January 19, 1994 in NLRC-NCR Case No. 00-03-02101-93 a case
for a money claim - underpayment of retirement benefit. Records do not
show that petitioner presented a Motion for Reconsideration of subject Decision
of the National Labor Relations Commission, which motion is, generally required
before the filing of Petition for Certiorari.

Complainant, in his position paper (Record, pages 11 to 14) states that he was
hired sometime in July 1980 as a stevedore continuously until he was advised
in April 1991 to retire from service considering that he already reached 65 years
old (sic); that accordingly, he did apply for retirement and was paid P3,156.39
for retirement pay... (Rollo, pp. 15, 26-27, 58-59).

Respondents, in their Reply to complainants position paper, allege (Record,

pages 18 to 21) that complainants latest basic salary was P120.34 per day; that
he only worked on rotation basis and not seven days a week due to numerous
stevedores who can not all be given assignments at the same time; that all
stevedores only for paid every time they were assigned or actually performed
stevedoring; that the computation used in arriving at the amount of P3,156.30
was the same computation applied to the other stevedores; that the use of divisor
303 is not applicable because complainant performed stevedoring job only on
call, so while he was connected with the company for the past 11 years, he did
not actually render 11 years of service; that the burden of proving that
complainants latest salary was P200.00 rests upon him; that he already
voluntarily signed a waiver of quitclaim; that if indeed respondent took
advantage of his illiteracy into signing his quitclaim, he would have immediately
filed this complaint but nay, for it took him two (2) years to do so.

The Decision of the National Labor Relations Commission in NLRC-NCR-CA No.

06701-94, April 20, 1995 (Rollo, pp. 18-21).

The National Labor Relations Commission reversed on jurisdictional ground the

aforesaid Decision of the Labor Arbiter; ruling, as follows:

... His claim for separation pay differential is based on the Collective Bargaining
Agreement (CBA) between his union and the respondent company

Since the instant case arises from interpretation or implementation of a collective

bargaining agreement, the Labor Arbiter should have dismissed it for lack of
jurisdiction in accordance with Article 217 (c) of the Labor Code, which
reads: (Underscoring supplied)

Art. 217. Jurisdiction of Labor Arbiter and the Commission.

xxx

(c) Cases arising from the interpretation or implementation of collective

bargaining agreement and those arising from the interpretation or enforcement
of company procedure/policies shall be disposed of by the Labor Arbiter by
referring the same to the grievance machinery and voluntary arbitrator as may
be provided in said agreements.

ISSUE:

Jurisdictional Issue

The jurisdiction of Labor Arbiters and Voluntary Arbitrator or Panel of Voluntary

Arbitrators is clearly defined and specifically delineated in the Labor Code. The
pertinent provisions of the Labor Code, read:

A. Jurisdiction of Labor Arbiters

Art. 217. Jurisdiction of Labor Arbiter and the Commission. -- (a) Except as
otherwise provided under this Code the Labor Arbiter shall have original and
exclusive jurisdiction to hear and decide, within thirty (30) calendar days after
the submission of the case by the parties for decision without extension, even
in the absence of stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may
file involving wages, rates of pay, hours of work and other terms and conditions
of employment;

4. claims for actual, moral, exemplary and other forms of damages arising from
the employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts; and,

6. Except claims for Employees Compensation, Social Security, Medicare and

maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an
amount exceeding five thousand pesos (P5,000) regardless of whether
accompanied with a claim for reinstatement.

xxx

(c) Cases arising from the interpretation or implementation of collective

bargaining agreement and those arising from the interpretation or enforcement
of company procedure/policies shall be disposed of by the Labor Arbiter by
referring the same to the grievance machinery and voluntary arbitrator so
maybe provided in said agreement.

B. Jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators

Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary
Arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall
have original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or enforcement
of company personnel policies referred to in the immediately preceding article.
Accordingly, violations of a Collective Bargaining Agreement, except those
which are gross in character, shall no longer be treated as unfair labor practice
and shall be resolved as grievances under the collective bargaining agreement.
For purposes of this Article, gross violations of Collective Bargaining Agreement
shall mean flagrant and/or malicious refusal to comply with the economic
provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the
Department of Labor and Employment shall not entertain disputes, grievances
or matters under the exclusive and original jurisdiction of the Voluntary
Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and
refer the same to the Grievance Machinery or Voluntary Arbitration provided in
the Collective Bargaining Agreement.

Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or
panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear
and decide all other labor disputes including unfair labor practices and
bargaining deadlocks.

The aforecited provisions of law cannot be read in isolation or separately. They

must be read as a whole and each Article of the Code reconciled one with the
other. An analysis of the provisions of Articles 217, 261, and 262 indicates,
that:

1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of

Voluntary Arbitrators over the cases enumerated in Articles 217, 261 and 262,
can possibly include money claims in one form or another.

2. The cases where the Labor Arbiters have original and exclusive jurisdiction
are enumerated in Article 217, and that of the Voluntary Arbitrator or Panel of
Voluntary Arbitrators in Article 261.

3. The original and exclusive jurisdiction of Labor Arbiters is qualified by an

exception as indicated in the introductory sentence of Article 217 (a), to wit:

Art. 217. Jurisdiction of Labor Arbiters ... (a) Except as otherwise provided
under this Code the Labor Arbiter shall have original and exclusive jurisdiction
to hear and decide ... the following cases involving all workers...

The phrase Except as otherwise provided under this Code refers to the
following exceptions:

A. Art. 217. Jurisdiction of Labor Arbiters ...

xxx

(c) Cases arising from the interpretation or implementation of collective

bargaining agreement and those arising from the interpretation or enforcement
of company procedure/policies shall be disposed of by the Labor Arbiter by
referring the same to the grievance machinery and voluntary arbitrator as may
be provided in said agreement.

B. Art. 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or
panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear
and decide all other labor disputes including unfair labor practices and
bargaining deadlocks.

Parenthetically, the original and exclusive jurisdiction of the Labor Arbiter under
Article 217 (c), for money claims is limited only to those arising from statutes or
contracts other than a Collective Bargaining Agreement. The Voluntary
Arbitrator or Panel of Voluntary Arbitrators will have original and exclusive
jurisdiction over money claims arising from the interpretation or implementation
of the Collective Bargaining Agreement and, those arising from the interpretation
or enforcement of company personnel policies, under Article 261.

4. The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is

provided for in Arts. 261 and 262 of the Labor Code as indicated above.

1. A close reading of Article 261 indicates that the original and exclusive
jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is limited
only to:

... unresolved grievances arising from the interpretation or implementation of

the Collective Bargaining Agreement and those arising from the interpretation
or enforcement of company personnel policies... Accordingly, violations of a
collective bargaining agreement, except those which are gross in character,
shall no longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. xxx.

2. Voluntary Arbitrators or Panel of Voluntary Arbitrators, however, can

exercise jurisdiction over any and all disputes between an employer and a
union and/or individual worker as provided for in Article 262.

Art. 262. Jurisdiction over other labor disputes. - The voluntary arbitrator or
panel of voluntary arbitrators, upon agreement of the parties, shall also hear
and decide all other labor disputes including unfair labor practices and
bargaining deadlocks.

It must be emphasized that the jurisdiction of the Voluntary Arbitrator or Panel

of Voluntary Arbitrators under Article 262 must be voluntarily conferred upon
by both labor and management. The labor disputes referred to in the same
Article 262 can include all those disputes mentioned in Article 217 over which
the Labor Arbiter has original and exclusive jurisdiction.

As shown in the above contextual and wholistic analysis of Articles 217, 261,
and 262 of the Labor Code, the National Labor Relations Commission
correctly ruled that the Labor Arbiter had no jurisdiction to hear and decide
petitioners money-claim underpayment of retirement benefits, as the
controversy between the parties involved an issue arising from the
interpretation or implementation of a provision of the collective bargaining
agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators has
original and exclusive jurisdiction over the controversy under Article 261
of the Labor Code, and not the Labor Arbiter.
G.R. No. L-58877 March 15, 1982

PEPSI-COLA BOTTLING COMPANY, COSME DE ABOITIZ, and ALBERTO M.

DACUYCUY, petitioners,
vs.
HON. JUDGE ANTONIO M. MARTINEZ, in his official capacity, and
ABRAHAM TUMALA, JR., respondents.

FACTS:

On September 19, 1980, respondent Abraham Tumala, Jr. filed a complaint in

the Court of First Instance of Davao, docketed as Civil Case No. 13494, against
petitioners Pepsi-Cola Bottling Co., Inc., its president Cosme de Aboitiz and other
company officers. Under the first cause of action, the complaint averred inter
alia that Tumala was a salesman of the company in Davao City from 1977 up to
August 21, 1980; that in the annual "Sumakwel" contest conducted by the
company in 1979, Tumala was declared winner of the "Lapu-Lapu Award" for his
performance as top salesman of the year, an award which entitled him to a prize
of a house and lot; and that petitioners, despite demands, have unjustly refused
to deliver said prize Under the second cause of action, it was alleged that on
August 21, 1980, petitioners, "in a manner oppressive to labor" and "without
prior clearance from the Ministry of Labor", "arbitrarily and ilegally" terminated
his employment. He prayed that petitioners be ordered, jointly and severally, to
deliver his prize of house and lot or its cash equivalent, and to pay his back
salaries and separation benefits, plus moral and exemplary damages, attorney's
fees and litigation expenses. He did not ask for reinstatement.

ISSUE:

WON the LA has jurisdiction

HELD:

We rule that the Labor Arbiter has exclusive jurisdiction over the case.

SECTION 1. Paragraph [a] of Art, 217 of the Labor Code as

amended is hereby further amended to read as follows:

[a] The Labor Arbiters shall have exclusive jurisdiction hear and
decide the following cases involving all workers, whether
agricultural or non-agricultural:

1] Unfair labor practice cases;

2] Unresolved issues in collective bargaining, including

those which involve wages, hours of work, and other
terms conditions of employment; and

3] All other cases arising from employer-employee

relations duly indorsed by the Regional Directors in
accordance with the provisions of this Code.

Provided, that the Regional Directors shall not indorse and Labor
Arbiters shall not entertain claims for moral or other forms of
damages.
It will be noted that paragraphs 3 and 5 of Article 217 were deleted from the
text of the above decree and a new provision incorporated therein, to wit:
"Provided that the Regional Directors shall not indorse and Labor Arbiters shall
not en certain claims for moral or other forms of damages." This amendatory
act thus divested the Labor Arbiters of their competence to pass upon claims
for damages by employees against their employers.

However, on May 1, 1980, Article 217, as amended by P.D. 1367, was amended
anew by P.D. 1691. This last decree, which is a verbatim reproduction of the
original test of Article 217 of the Labor Code, restored to the Labor Arbiters of
the NLRC exclusive jurisdiction over claims, money or otherwise, arising from
employer-employee relations, except those expressly excluded therefrom.

In sustaining its jurisdiction over the case at bar, the respondent court relied
on Calderon vs. Court of Appeals 4 , where We ruled that an employee's action
for unpaid salaries, alowances and other reimbursable expenses and damages
was beyond the periphery of the jurisdictional competence of the Labor
Arbiters. Our ruling in Calderon, however, no longer applaies to this case
because P.D. 1367, upon which said decision was based, had already been
superceded by P.D. 1691. As heretofore stated, P.D. 1691 restored to the Labor
Arbiters their exlcusive jurisdiction over said classes of claims.

Respondent Tumala maintains that his action for delivery of the house and lot,
his prize as top salesman of the company for 1979, is a civil controversy triable
exclusively by the court of the general jurisdiction. We do not share this view.
The claim for said prize unquestionably arose from an employer-employee
relation and, therefore, falls within the coverage of par. 5 of P.D. 1691, which
speaks of "all claims arising from employer-employee relations, unless
expressly excluded by this Code." Indeed, Tumala would not have qualitfied for
the content, much less won the prize, if he was not an employee of the
company at the time of the holding of the contest. Besides, the cause advanced
by petitioners to justify their refusal to deliver the prize—the alleged fraudulent
manipulations committed by Tumala in connection with his duties as salesman
of the company—involves an inquiry into his actuations as an employee.

Besides, to hold that Tumala's claim for the prize should be passed upon by
the regular court of justice, independently and separately from his claim for
back salaries, retirement benefits and damages, would be to sanction split
juridiction and multiplicity of suits which are prejudicial to the orderly
administration of justice.
G.R. No. 80774 May 31, 1988

SAN MIGUEL CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and RUSTICO
VEGA, respondents.

Siguion Reyna, Montecillo & Ongsiako Law Offices for petitioner.

The Solicitor General for public respondent.

FACTS:

In line with an Innovation Program sponsored by petitioner San Miguel

Corporation ("Corporation;" "SMC") and under which management undertook to
grant cash awards to "all SMC employees ... except [ED-HO staff, Division
Managers and higher-ranked personnel" who submit to the Corporation Ideas
and suggestions found to be beneficial to the Corporation, private respondent
Rustico Vega submitted on 23 September 1980 an innovation proposal. Mr.
Vega's proposal was entitled "Modified Grande Pasteurization Process," and was
supposed to eliminate certain alleged defects in the quality and taste of the
product "San Miguel Beer Grande:"

Mr. Vega at that time had been in the employ of petitioner Corporation for
thirteen (1 3) years and was then holding the position of "mechanic in the
Bottling Department of the SMC Plant Brewery situated in Tipolo, Mandaue City.

Petitioner Corporation, however, did not find the aforequoted proposal

acceptable and consequently refused Mr. Vega's subsequent demands for a cash
award under the Innovation Program.

On 22 February 1983., a Complaint 2 (docketed as Case No. RAB-VII-0170-83)

was filed against petitioner Corporation with Regional Arbitration Branch No. VII
(Cebu City) of the then.", Ministry of Labor and Employment. Frivate respondent
Vega alleged there that his proposal "[had] been accepted by the methods analyst
and implemented by the Corporation [in] October 1980," and that the same
"ultimately and finally solved the problem of the Corporation in the production
of Beer Grande." Private respondent thus claimed entitlement to a cash prize of
P60,000.00 (the maximum award per proposal offered under the Innovation
Program) and attorney's fees.

ISSUE: WON the LA and NLRC have jurisdiction over the case

The jurisdiction of Labor Arbiters and the National Labor Relations Commission
is outlined in Article 217 of the Labor Code, as last amended by Batas Pambansa
Blg. 227 which took effect on 1 June 1982:

ART. 217. Jurisdiction of Labor Arbiters and the commission. (a) The
Labor Arbiters shall have the original and exclusive jurisdiction to
hear and decide within thirty (30) working days after submission of
the case by the parties for decision, the following cases involving
are workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

 2. Those that workers may file involving wages, hours
of work and other terms and conditions of
employment;

3. All money claims of workers, including those based

on non-payment or underpayment of wages, overtime
compensation, separation pay and other benefits
provided by law or appropriate agreement, except
claims for employees' compensation, social security,
medicare and maternity benefits;

4. Cases involving household services; and

5. Cases arising from any violation of Article 265 of

this; Code, including questions involving the legality of
strikes and lockouts.

(b) The Commission shall have exclusive appellate jurisdiction over

all cases decided by Labor Arbiters. (Emphasis supplied)

While paragraph 3 above refers to "all money claims of workers," it is not

necessary to suppose that the entire universe of money claims that might be
asserted by workers against their employers has been absorbed into the original
and exclusive jurisdiction of Labor Arbiters. In the first place, paragraph 3
should be read not in isolation from but rather within the context formed by
paragraph 1 related to unfair labor practices), paragraph 2 (relating to claims
concerning terms and conditions of employment), paragraph 4 (claims relating
to household services, a particular species of employer-employee relations), and
paragraph 5 (relating to certain activities prohibited to employees or to
employers).<äre||anº•1àw> It is evident that there is a unifying element which
runs through paragraphs 1 to 5 and that is, that they all refer to cases or
disputes arising out of or in connection with an employer-employee relationship.
This is, in other words, a situation where the rule of noscitur a sociis may be
usefully invoked in clarifying the scope of paragraph 3, and any other paragraph
of Article 217 of the Labor Code, as amended. We reach the above conclusion
from an examination of the terms themselves of Article 217, as last amended by
B.P. Blg. 227, and even though earlier versions of Article 217 of the Labor Code
expressly brought within the jurisdiction of the Labor Arbiters and the NLRC
"cases arising from employer employee relations," 6 which clause was not
expressly carried over, in printer's ink, in Article 217 as it exists today. For it
cannot be presumed that money claims of workers which do not arise out of or
in connection with their employer-employee relationship, and which would
therefore fall within the general jurisdiction of the regular courts of justice, were
intended by the legislative authority to be taken away from the jurisdiction of the
courts and lodged with Labor Arbiters on an exclusive basis. The Court,
therefore, believes and so holds that the money claims of workers" referred to in
paragraph 3 of Article 217 embraces money claims which arise out of or in
connection with the employer-employee relationship, or some aspect or incident
of such relationship. Put a little differently, that money claims of workers which
now fall within the original and exclusive jurisdiction of Labor Arbiters are those
money claims which have some reasonable causal connection with the employer-
employee relationship.

Applying the foregoing reading to the present case, we note that petitioner's
Innovation Program is an employee incentive scheme offered and open only to
employees of petitioner Corporation, more specifically to employees below the
rank of manager. Without the existing employer-employee relationship between
the parties here, there would have been no occasion to consider the petitioner's
Innovation Program or the submission by Mr. Vega of his proposal concerning
beer grande; without that relationship, private respondent Vega's suit against
petitioner Corporation would never have arisen. The money claim of private
respondent Vega in this case, therefore, arose out of or in connection with his
employment relationship with petitioner.

The next issue that must logically be confronted is whether the fact that the
money claim of private respondent Vega arose out of or in connection with his
employment relation" with petitioner Corporation, is enough to bring such money
claim within the original and exclusive jurisdiction of Labor Arbiters.

The Court notes that the SMC Innovation Program was essentially an
invitation from petitioner Corporation to its employees to submit
innovation proposals, and that petitioner Corporation undertook to grant
cash awards to employees who accept such invitation and whose innovation
suggestions, in the judgment of the Corporation's officials, satisfied the
standards and requirements of the Innovation Program 10 and which,
therefore, could be translated into some substantial benefit to the
Corporation. Such undertaking, though unilateral in origin, could
nonetheless ripen into an enforceable contractual (facio ut
des) 11 obligation on the part of petitioner Corporation under certain
circumstances. Thus, whether or not an enforceable contract, albeit
implied arid innominate, had arisen between petitioner Corporation and
private respondent Vega in the circumstances of this case, and if so,
whether or not it had been breached, are preeminently legal questions,
questions not to be resolved by referring to labor legislation and having
nothing to do with wages or other terms and conditions of employment,
but rather having recourse to our law on contracts.