Deltavenures Resources v.
Cabato properly within the jurisdiction of the Labor Arbiterto
G.R. 118216
Facts:
In 1992, a Decision was rendered by Executive Labor
Arbiter Norma Olegario, NLRC-Regional Arbitration
Board, Cordillera Administrative Region entitled
Bernardino et al. v. GreenMountain Farm, Roberto
Ongpin and Almus Alabe which declared the
respondents guilty of Illegal Dismissal and Unfair
Labor Practice, ordering them to pay the complainants
in solidum1 in the amount respective of the illegally
dismissed employees.
In June 1994, the LA issued a writ of execution
directing NLRC Deputy Sherriff Ventura to execute
judgment against respondents then proceeded to
enforce the writ by garnishing certain properties of
respondents.
Finding that the respondents do not have sufficient
personal properties to satisfy the monetary award,
Sherriff Ventura proceeded to levy upon a real
property registered in Roberto Ongpins name one of
the respondents.
Meanwhile, before the scheduled auction sale,
Deltaventures filed before the Commission a third
party claim asserting ownership over the property
levied upon and subject of the Sherriff notice of sale.
LA thus issued an order to suspend the auction sale
until Deltaventures claim is resolved.
However, in August 1994, Deltaventures filed with the
RTC a complaint for injunction and damages with
prayer for the issuance of TRO against Sherriff
Ventura reiterating the same allegation raised in the
third party claim it filed with the Commission.
Further, Deltaventures filed with the NLRC a
manifestation, questioning the NLRCs authority to hear
the case, the matter being within the jurisdiction of the
regular courts. The manifestation however was
dismissed by the LA.
Meanwhile, respondent-laborers, moved for the
dismissal of the civil case on the ground of lack of
jurisdiction.
Issue:
May the trial court take cognizance of the complaint
filed by Deltaventures
Ruling:
The Court notes that 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--visthe alias writ of
execution, including the acts performed by the Labor
Arbiter and the Deputy Sherriff implementing the writ.
Thus, the complaint was in effect a motion to quash on
the writ of execution of a decision rendered on a case
wit: Illegal Dismissal and ULP.
Considering the factual setting, it is then logical to
conclude that the subject matter or the third party claim
is but an incident of the labor case, a matter beyond
the jurisdiction of the RTC. Toehold otherwise is to
sanction split jurisdiction which is obnoxious to the
orderly administration of justice.
Jurisdiction once acquired, is not lost upon the
instance of the parties but continues until the case is
terminated. Whatever irregularities attended the
issuance and execution of the writ should be referred
to the same administrative tribunal which rendered the
decision. 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 LA and NLRC 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
is to the exclusion of the regular courts.
Further, the Labor Code in Article 254 explicitly
prohibits issuance of a TRO or permanent injunction or
restraining order in any case involving or growing out
of labor disputes by any court or other entity (except as
otherwise provided in Articles 218 and 264). As
correctly observed by the court a quo, the main issue
and subject of the amended complaint for injunction
are questions interwoven by the execution of the
Commissions decision.
Furthermore, the power of the Labor Arbiter to issue
writ of execution carries with it the power to inquire into
the correctness of the execution of his decision and to
consider whatever supervening events might transpire
during such execution.
Lastly, the Regional Trial Court, being a co-equal body
of the NLRC, has no jurisdiction tissue any restraining
order or injunction to enjoin the execution of any
decision of the latter.
Dy vs. National Labor Relations Commission
G.R. No. L-68544. October 27, 1986
Doctrine:
It is the Securities and Exchange Commission (SEC)
and not the National Labor Relations Commission
(NLRC) that has jurisdiction over a dispute involving
the termination of a bank manager as a result of his
non-reelection, thereto, as prescribed in the Bank’s by-
laws.
It is no hindrance to SEC jurisdiction that a person
raises in his complaint the issues that he was illegally
dismissed and asks for remuneration where
complainant is not a mere employee but a stockholder
and officer of the corporation.
FACTS:
Petitioners Lorenzo C. Dy, Zosimo Dy, Sr., William
Ibero, Ricardo Garcia and Rural Bank of Ayungon, Inc.
assail in this Court the resolution of public respondent
NLRC dismissing their appeal from the decision of the
Executive Labor Arbiter in Cebu City which found
private respondent Carlito H. Vailoces to have been
illegally dismissed by them.
Private respondent 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 4 of the bank’s by-laws, 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. Private respondent Vailoces
was not re-elected as bank manager. Because of this,
the Board passed a Resolution relieving him as bank
manager.
Subsequently, Vailoces filed a complaint for illegal
dismissal and damages with the Ministry of Labor and
Employment against herein petitioners, asserting that
an illegal stockholders’ meeting was held. In their
answer, petitioners denied the charge of illegal
dismissal. The Executive Labor Arbiter found that
Vailoces was illegally dismissed due to the resentment
of petitioners against Vailoces and consequently
ordered the individual petitioners Lorenzo Dy and
Zosimo Dy, Sr. to pay Vailoces jointly and severally the
sum of P111,480.60 and reinstate the latter to his
position as bank manager, with additional backwages.
Petitioner Lorenzo Dy appealed to the NLRC,
assigning error to the decision of the Labor Arbiter,
one being that the matter of Vailoces’ relief was within
the adjudicatory powers of the Securities and
Exchange Commission. The NLRC bypassed the
issues and dismissed the appeal for having been filed
late. Hence, this petition.
ISSUE:
Whether or not the SEC, and not respondent NLRC,
has jurisdiction over the dispute.
RULING:
YES. While the comment of Vailoces traverses the
averments of the petition that of the Solicitor General
on behalf of public respondents perceives the matter
as an intra-corporate controversy of the class
described in Section 5, par. (c) of Presidential Decree
No. 902-A, namely:
‘Original and exclusive jurisdiction to hear and decide
cases involving:
Xxxx
“(c) Controversies in the election or appointments
of directors, trustees, officers or managers of such
corporations, partnerships or associations.”’
explicitly declared to be within the original jurisdiction
of the SEC, and recommends that the questioned
resolution of the NLRC as well as the decision of the
Labor Arbiter be set aside as null and void.
The judgment of the Labor Arbiter and the resolution of
the NLRC are void for lack of jurisdiction. It is of no
moment that Vailoces, in his amended complaint,
seeks other relief which would seemingly fall under the
jurisdiction of the Labor Arbiter, because
underpayment of salary and non-payment of living
allowance show that they are actually part of the
perquisites of his elective position, hence, intimately
linked with his relations with the corporation. The
question of remuneration involving a person who is not
a mere employee but a stockholder and officer of a
corporation is not a simple labor problem but a matter
that comes within the area of corporate affairs and
management, and is in fact a corporate controversy in
contemplation of the Corporate Code.
Wherefore, the questioned decision of the Labor
Arbiter and the Resolution of the NLRC dismissing
petitioners’ appeal are hereby set aside for being
rendered without jurisdiction.
RAUL C. COSARE, Petitioner, v. BROADCOM
ASIA, INC. and DANTE AREVALO, Respondents.
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 memorandum
accusing 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 CA granted 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.
ISSUES:
Was the case instituted by Cosare an intra-corporate
dispute that was within the original jurisdiction of the
RTC, and not of the LAs?
Was Cosare constructively and illegally dismissed from
employment by the respondents?
HELD:
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.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,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.
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.
***
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 corporations by-laws.
In Tabang v. NLRC, the Court also made the following
pronouncement on the nature of corporate offices:
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
corporations 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.
The Court disagrees with the respondents and the CA.
The only officers who are specifically listed, and thus
with offices that are created under Broadcoms by-laws
are the following: the President, Vice-President,
Treasurer and Secretary. Although a blanket authority
provides for the Boards 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 Broadcoms 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.
The CAs heavy reliance on the contents of the General
Information Sheets, 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.
Finally, the mere fact that Cosare was a stockholder of
Broadcom at the time of the cases 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.
***
Constructive dismissal occurs when there is cessation
of work because continued employment is rendered
impossible, unreasonable, or unlikely as when there is
a demotion in rank or diminution in pay or when a clear
discrimination, insensibility, or disdain by an employer
becomes unbearable to the employee leaving the latter
with no other option but to quit.
The Court emphasized in King of Kings Transport, Inc.
v. Mamac 553 Phil. 108 the standards to be observed
by employers in complying with the service of notices
prior to termination:
The first written notice to be served on the employees
should contain the specific causes or grounds for
termination against them, and a directive that the
employees are given the opportunity to submit their
written explanation within a reasonable period.
"Reasonable opportunity" under the Omnibus Rules
means every kind of assistance that management
must accord to the employees to enable them to
prepare adequately for their defense. This should be
construed as a period of at least five (5) calendar days
from receipt of the notice to give the employees an
opportunity to study the accusation against them,
consult a union official or lawyer, gather data and
evidence, and decide on the defenses they will raise
against the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation
and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve
as basis for the charge against the employees. A
general description of the charge will not suffice.
Lastly, the notice should specifically mention which
company rules, if any, are violated and/or which
among the grounds under Art. 282 is being charged
against the employees.
In sum, the respondents were already resolute on a
severance of their working relationship with Cosare,
notwithstanding the facts which could have been
established by his explanations and the respondents
full investigation on the matter. In addition to this, the
fact that no further investigation and final disposition
appeared to have been made by the respondents on
Cosares case only negated the claim that they actually
intended to first look into the matter before making a
final determination as to the guilt or innocence of their
employee. This also manifested from the fact that even
before Cosare was required to present his side on the
charges of serious misconduct and willful breach of
trust, he was summoned to Arevalos office and was
asked to tender his immediate resignation in exchange
for financial assistance.

The charge of abandonment was inconsistent with this

imposed suspension. "Abandonment is the deliberate
and unjustified refusal of an employee to resume his
employment. To constitute abandonment of work, two
elements must concur: (1) the employee must have
failed to report for work or must have been absent
without valid or justifiable reason; and (2) there must
have been a clear intention on the part of the
employee to sever the employer-employee relationship
manifested by some overt act."Cosares failure to
report to work beginning April 1, 2009 was neither
voluntary nor indicative of an intention to sever his
employment with Broadcom. It was illogical to be
requiring him to report for work, and imputing fault
when he failed to do so after he was specifically
denied access to all of the company's assets. Hence,
the Court held Petitioner was constructively dismissed
by respondent.

***
Court reiterated that an illegally or constructively
dismissed employee is entitled to: (1) either
reinstatement, if viable, or separation pay, if
reinstatement is no longer viable; and (2)
backwages.The award of exemplary damages was
also justified given the NLRC's finding that the
respondents acted in bad faith and in a wanton,
oppressive and malevolent manner when they
dismissed Cosare. It is also by reason of such bad
faith that Arevalo was correctly declared solidarily
liable for the monetary awards.
Suario vs. BPI. HELD:
G.R. No. L-50459. August 25, 1989 NO
Although it is already settled that Labor Arbiters are
FACTS: allowed to award moral and other forms of damages
Petitioner Leonardo D. Suario was the head of the loan arising from ER-EE relations, it is consistently ruled
section of respondent BPI in 1976. During his that in the absence of a wrongful act or omission or of
employment he pursued his studies of law with the fraud or bad faith, moral damages cannot be awarded
consent of the BPI
The SC did not find any bad faith or fraud on the part
Sometime in March 1976, Suario verbally requested of the bank officials who denied the petitioner’s request
the then VP and Branch Manager, Mr. Armando N. for 6 months’ leave of absence without pay. He was
Guilatico, for a 6-month leave of absence without pay merely given personal assurances which could be
in order for him to take the pre-bar review in Manila. reconsidered in later developments. There is no
Mr. Guilatico informed Suario that there would be no evidence that they meant to deceive the petitioner.
problem as to the requested leave of absence.
Sometime in May 1976, Suario received a verbal Therefore, the fact that petitioner’s request was
notice from the new Branch Manager, Mr. Vicente denied, does not entitle him to damages.
Casino, that he was approved only a 30 day LOA.
However, Mr Guilatico, then assigned in Head Office WHEREFORE, PETITION DENIED.
as VP advised Mr. Casino to inform Suario to avail the
30- day LOA and proceed to Manila since the request
would be ultimately granted. Suario availed the 30- day
LOA and proceeded to Manila. During the 1st week of
August, he received a letter ordering him to report
back for work since his request was disapproved. He
decided not to report back because of the considerable
expenses already incurred in Manila. Hence, he
received a application for a clearance to terminate on
the ground of resignation/or abandonment. Suario
failed to file his opposition because he was busy taking
up the review

During the 1st week of December 1976, Suario went to

respondent BPI but was verbally informed that he was
already dismissed. He wrote a letter to the respondent
bank requesting for a written and formal advise as to
his real status. The lawyers of BPI replied that his
services is terminated. Therefore, Suario filed a
complaint for separation pay, damages and attorney’s
fees against the BPI on the ground that he was illegally
dismissed.

The Labor Arbiter ordered BPI to pay Suario’s claim for

separation pay. His claim for damages and attorney’s
fee were dismissed for lack of merit

On appeal, NLRC affirmed the decision of the Labor

Arbiter

Issue 1:
Whether NLRC has no authority to entertain claims for
moral and other forms of damages

HELD:
NO
P.D. 1691, a decree which substantially reenacted
Article 217 of the Labor Code in its original form,
nullified P.D. 1367 and restored to the Labor Arbiters
and the NLRC their jurisdiction to award all kinds of
damages in cases arising from ER-EE relationship.

Issue2:
Whether petitioner Suario is entitled to his claim for
moral damages
UERM Memorial Medical Center vs NLRC (1997)
G.R. 1104419
Facts:
Consequently, a complaint was filed by the private
respondents, represented by the Federation of Free
Workers (FFW), claiming salary differentials under
Republic Act Nos. 6640 and 6727, correction of the
wage distortion and the payment of salaries for
Saturdays and Sundays under Policy Instruction No.
54.
Labor Arbiter Nieves de Castro sustained the private
respondents except for their claim of wage distortion.
Within the reglementary period for appeal, the
petitioners filed their Notice and Memorandum of
Appeal with a Real Estate Bond consisting of land and
various improvements therein worth P102,345,650.
The private respondents moved to dismiss the appeal
on the ground that Article 223 of the Labor Code, as
amended, requires the posting of a cash or surety
bond. The NLRC directed petitioners to post a cash or
surety bond of P17,082,448.56 with a warning that
failure to do so would cause the dismissal of the
appeal.
The petitioners filed a Motion for Reconsideration
alleging it is not in a viable financial condition to post a
cash bond nor to pay the annual premium of
P700,000.00 for a surety bond. On 6 October 1992,
the NLRC dismissed petitioners' appeal. Petitioners'
Motion for Reconsideration was also denied by the
NLRC in a resolution dated 7 June 1993.
Issue:
WON in perfecting an appeal to the National Labor
Relations Commission (NLRC) a property bond is
excluded by the two forms of appeal bond — cash or
surety — as enumerated in Article 223 of the Labor
Code.
Held:
Yes. The applicable law is Article 223 of the Labor
Code, as amended by Republic Act No. 6715, which
provides:
"In case of a judgment involving a monetary award, an
appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary
award in the judgment appealed from."
We have given a liberal interpretation to this provision.
In YBL (Your Bus Line) v. NLRC we ruled:
"x x x that while Article 223 of the Labor Code, as
amended by Republic Act No. 6715, requiring a cash
or surety bond in the amount equivalent to the
monetary award in the judgment appealed from for the
appeal to be perfected, may be considered a
jurisdictional requirement, nevertheless, adhering to
the principle that substantial justice is better served by
allowing the appeal on the merits threshed out by the
NLRC, the Court finds and so holds that the foregoing
requirement of the law should be given a liberal
interpretation."
Then too, in Oriental Mindoro Electric Cooperative, Inc.
v. National Labor Relations Commission we held: "The
intention of the lawmakers to make the bond an
indispensable requisite for the perfection of an appeal
by the employer is underscored by the provision that
an appeal by the employer may be perfected "only
upon the posting of a cash or surety bond." The word
"only" makes it perfectly clear, that the lawmakers
intended the posting of a cash or surety bond by the
employer to be the exclusive means by which an
employer's appeal may be perfected. The requirement
is intended to discourage employers from using an
appeal to delay, or even evade, their obligation to
satisfy their employees' just and lawful claims.
Considering, however, that the current policy is not to
strictly follow technical rules but rather to take into
account the spirit and intention of the Labor Code, it
would be prudent for us to look into the merits of the
case, especially since petitioner disputes the allegation
that private respondent was illegally dismissed."
We reiterate this policy which stresses the importance
of deciding cases on the basis of their substantive
merit and not on strict technical rules. In the case at
bar, the judgment involved is more than P17 million
and its precipitate execution can adversely affect the
existence of petitioner medical center. Likewise, the
issues involved are not insignificant and they deserve
a full discourse by our quasi-judicial and judicial
authorities. We are also confident that the real property
bond posted by the petitioners sufficiently protects the
interests of private respondents should they finally
prevail. It is not disputed that the real property offered
by petitioners is worth P102,345,650. The judgment in
favor of private respondent is only a little more than
P17 million.