WPP Marketing Communications, Inc., et al. vs. Jocelyn M.
Galera benefits, and moral and exemplary damages, among others.
GR No. 169207; March 25, 2010
Jocelyn M. Galera vs. WPP Marketing Communications, Inc., et al.
GR No. 169239; March 25, 2010
Facts:   NLRC ruled that the labor arbiter had no jurisdiction over the case because
Petitioner Jocelyn M. Galera is an American citizen, who was hired by
respondent John Steedman, Chairman of WPP Worldwide and Chief Executive
Officer of Mindshare, Co., a corporation based in Hong Kong, China, to work
in the Philippines for private respondent WPP Marketing Communications,
Inc. (WPP), a corporation registered and operating under the laws of
Philippines. Under the employment contract, Galera would commence
employment on September 1, 1999, with the position of Managing Director of
Mindshare Philippines. Thus, without obtaining an alien employment permit,
Galera commenced her employment with WPP Philippines on the said date. It
was only after four months from the time she commenced employment that
private respondent WPP filed before the Bureau of Immigration an
application for petitioner Galera to receive a working visa. In the application,
she was designated as Vice-President of WPP. Petitioner alleged that she was
constrained to sign the application in order that she could remain in the
Philippines and retain her employment.
On December 14, 2000, private respondent Galera was verbally informed by
Steedman that her employment had been terminated. She received her
termination letter the following day.  Her termination prompted Galera to
commence a complaint for illegal dismissal before the labor arbiter. The labor
arbiter found WPP, Steedman, Webster, and Lansang liable for illegal
dismissal and damages.  Furthermore the labor arbiter stated that Galera was
not only illegally dismissed but was also not accorded due process, saying that
Galera was not given an opportunity by WPP to defend herself and explain
her side. Thus, WPP did not observe both substantive and procedural due
process in terminating Galera’s employment. The labor arbiter ordered WPP
to reinstate Galera and to pay her backwages, transportation and housing
On appeal, the NLRC reversed the labor arbiter’s ruling. The NLRC ruled that
Galera was WPP’s Vice-President, and therefore, a corporate officer at the
time she was removed by the Board of Directors on 14 December 2000. The
being a corporate officer, a case arising from her termination is considered as
an intra-corporate dispute, which was cognizable by the Securities and
Exchange Commission under P.D. 902-A (but now by the Regional Trial Courts
designated as Commercial Courts by the Supreme Court pursuant to Section
5.2 of RA No.8799). 
The Court of Appeals reversed the NLRC. It ruled that Galera’s appointment
by the Board of Directors of the WPP as Vice President for Media had no legal
effect as WPP’s by-laws provided for only one Vice-President, which at that
time was occupied. Furthermore, WPP’s by-laws did not include a managing
director as among its corporate officers. The Court of Appeals ordered WPP
to pay Galera backwages and separation pay, as well as housing benefits,
moral and exemplary damages, and attorney’s fees, among others. 
The case was subsequently elevated to the Supreme Court.
Issues:
1.    Is Galera an employee or a corporate officer of WPP?
2.    Did the labor arbiter have jurisdiction over the case?
3.    Was Galera illegally dismissed?
4.    Is Galera entitled to collect the award of backwages and damages even if
she did not have an alien employment permit when she commenced her
employment in the Philippines?
 
Ruling (First Issue):
Galera is an employee of WPP. She is not a corporate officer of WPP. An
examination of WPP’s by-laws resulted in a finding that Galera’s appointment
as a corporate officer (Vice-President with the operational title of Managing
Director of Mindshare) during a special meeting of WPP’s Board of Directors
is an appointment to a non-existent corporate office. WPP’s by-laws provided
for only one Vice-President. At the time of Galera’s appointment on
December 31, 1999, WPP already had one Vice-President in the person of
Webster. Galera cannot be said to be a director of WPP also because all five
directorship positions provided in the by-laws are already occupied.
The appellate court further justified that Galera was an employee and not a
corporate officer by subjecting WPP and Galera’s relationship to the four-fold
test: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer’s power to control
the employee with respect to the means and methods by which the work is to
be accomplished. The appellate court found that Sections 1 and 4 of the
employment contract mandate where and how often she is to perform her
work; Sections 3, 5, 6 and 7 show that wages she receives are completely
controlled by WPP; and Sections 10 and 11 clearly state that she is subject to
the regular disciplinary procedures of WPP.
(Second Issue):
The Labor Arbiter had jurisdiction over the illegal dismissal complaint filed by
Galera. Galera being an employee, the Labor Arbiter and the NLRC had
jurisdiction over her illegal dismissal complaint. Article 217 of the Labor Code
vests the Labor Arbiter with the jurisdiction to hear and decide, among others
termination disputes, involving workers, whether agricultural or non-
agricultural.
(Third Issue):
Yes, WPP’s dismissal of Galera lacked both substantive and procedural due
process.
WPP failed to prove any just or authorized cause for Galera’s dismissal. WPP
was unable to substantiate the allegations of Steedman’s December 15, 2000
letter to Galera, (questioning her leadership and competence). Galera, on the
other hand, presented documentary evidence in the form of congratulatory
letters, including one from Steedman, which contents are diametrically
opposed to the December 15, 2000 letter. Also, the law requires that the
employer must furnish the worker sought to be dismissed with two written
notices before termination of employment can be legally effected: (1) notice
which apprises the employee of the particular acts or omissions for which his
dismissal is sought; and (2) the subsequent notice which informs the
employee of the employer’s decision to dismiss him. Failure to comply with
the requirements taints the dismissal with illegality. WPP’s acts clearly show
that Galera’s dismissal did not comply with the two-notice rule.
(Fourth Issue):
No, Galera could not claim the employees benefits she is entitled under
Philippine Labor Laws. The law and the rules are consistent in stating that the
employment permit must be acquired prior to employment. Article 40 of the
Labor Code states: "Any alien seeking admission to the Philippines for
employment purposes and any domestic or foreign employer who desires to
engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor. Section 4, Rule XIV, Book
1 of the Implementing Rules and Regulations provides, among others, that if
an alien enters the country under a non-working visa and wishes to be
employed thereafter, he may only be allowed to be employed upon
presentation of a duly approved employment permit.
Galera cannot come to this Court with unclean hands. To grant Galera’s
prayer is to sanction the violation of the Philippine labor laws requiring aliens
to secure work permits before their employment. We hold that the status
quo must prevail in the present case and we leave the parties where they are.
This ruling, however, does not bar Galera from seeking relief from other
jurisdictions.