Abao, Gennelyn M.

Arellano University School of Law

20140405 Labor Law Review

MATLING INDUSTRIAL AND COMMERCIAL CORP., ET AL vs. COROS

G.R. No. 157802, October 13, 2010
Bersamin, J.

FACTS: Respondent Ricardo Coros was dismissed by Petitioner Matling as its VP for
Finance and Administratation. Coros then filed an illegal dismissal case with the NLRC,
Sub-Regional Arbitration Branch XII, Iligan City. Petitioners moved to dismiss the case
on the ground 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 Matlings Board of Directors aside from being its Vice-
President for Finance and Administration prior to his termination. Coros opposed the
same insisting that his status as a member of Matlings 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.

The Labor Arbiter dismissed the case. On Appeal, the NLRC set aside the
decision of the LA, stating that such VP position was not listed in the Company's
Constitution and By-Laws; hence, Coros was not a corporate officer. The motion for
reconsideration by petitioners was denied.

Petitioners filed a petition for certiorari with the CA, to which the latter dismissed:
Coros' position was not a corporate office but an ordinary office. Hence, this petition

ISSUE: Whether the LA or the RTC had jurisdiction over his complaint for illegal
dismissal.

HELD: Coros’ position was an ordinary office, not a corporate office. 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. 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.

Also, the LA has jurisdiction over the case. Even though he might have become a
stockholder of Matling in 1992, his promotion to the position of Vice President for
Finance and Administration in 1987 was by virtue of the length of quality service he had
rendered as an employee of Matling. His subsequent acquisition of the status of
Director/stockholder had no relation to his promotion. Besides, his status of
Director/stockholder was unaffected by his dismissal from employment as Vice
President for Finance and Administration. 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.