LABOR RELATIONS

Title: Dy v NLRC GR No. L-68544

Date: October 27, 1986
Ponente: Narvasa, J.
Petitioner: Lorenzo C. Dy, Zosimo Dy, Sr., William Ibero, – Respondent: National Labor Relations Commission And
Ricardo Garcia And Rural Bank Of Ayungon, Inc., Executive Labor Arbiter Alberto L. Dalmacion And Carlito
H. Vailoces

Nature of the case: 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 aresult 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
1. Carlito H. Vailoces, herein private respondent, was the manager of the Rural Bank of Ayungon, a banking
institution duly organized under Philippine laws. He was also a director and stockholder of the bank.
2. On June 4, 1983, a special stockholders' meeting was called for the purpose of electing the members of the

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bank's Board of Directors, and thereafter, elect the bank's executive officers.
3. Vailoces was not re-elected as bank manager. Afterwards, the Board passed Resolution No. 5, series of 1983,

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relieving him as bank manager.

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4. On August 3, 1983, Vailoces filed a complaint for illegal dismissal and damages with the Ministry of Labor
and Employment against herein petitioners.

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5. Subsequently, the complaint was amended to add causes for action for underpayment of salary and non-

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payment of living allowance. He alleged that he was not given an opportunity to be heard upon his dismissal
and such dismissal was found motivated by Lorenzo Dy's desire to take over the management and control of
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the bank, not to mention the fact that he (Dy) harbored ill feelings against Vailoces on account of the latter's
ling of a complaint for violation of the corporation code against him and another complaint for compulsory
recognition of natural child with damages against Zosimo Dy, Sr.
6. Petitioners answered that his position was an elective one and the basis of his dismissal is his absenteeism and
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negligence in the performance of his duties

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7. Executive Labor Arbiter ruled in favor of private respondent, and ordered petitioner to pay cost of living
allowance, underpaid monthly salary, and the sum of P111,480.60 representing his salary differentials, cost of
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living allowances, back wages from date of dismissal up to the date of the decision (November 29, 1983),
moral and exemplary damages, and attorney's fees; and
8. Petitioners appealed to NLRC, however, the latter bypassed the issues raised and simply dismissed the appeal
for having been filed late.
9. Hence, this petition.
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ISSUE/S
Whether or not the NLRC has jurisdiction over the case.
RATIO
is

NO.
1. Labor Arbiter and the resolution of the NLRC are void for lack of jurisdiction
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2. Vailoces, in his amended complaint, seeks other relief which would seemingly fall under the jurisdiction of the
Labor Arbiter, because a closer look at these — underpayment of salary and non-payment of living allowance —
shows that they are actually part of the perquisites of his elective position, hence, intimately linked with his relations
with the corporation.
3. The question of remuneration, involving as it does, a person who is not a mere employee but a stockholder and
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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.

RULING
WHEREFORE, the questioned decision of the Labor Arbiter and the Resolution of the NLRC dismissing petitioners' appeal
from said decision are hereby set aside because rendered without jurisdiction. The amended complaint for illegal dismissal,
etc., basis of said decision and Resolution, is ordered dismissed, without prejudice to private respondent's seeking recourse in

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 the appropriate forum.

GAURANA

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