CASE DIGEST

LABOR
RELATIONS
DY VS NLRC
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:
Petitioners are members of the Board of Directors
of the Rural Bank of Ayungon and private
respondent is the Bank’s former manager.
Respondent filed a complaint of illegal dismissal
and damages due to a Director’s meeting in which he
was not re-elected to the position of Manager by the
Bank’s new Board of Directors.
FACTS:
Respondent contended that the new Board of
Directors were elected during an illegal
stockholder’s meeting and that the decision to
terminate him was illegal since he was not afforded
the opportunity to be heard.
Petitioner countered that the position in question
was an elective one and that respondent was not re-
elected due to the Bank’s loss of confidence in him.
Petitioner also raised the issue of jurisdiction of the
Labor Arbiter over the case.
FACTS:
The Labor Arbiter decided in favor of the
respondent and ruled that there was illegal dismissal.
The NLRC, upon appeal, dismissed the petition due
to late filing.
ISSUE:
Whether the Labor Arbiter and NLRC has
jurisdiction to rule on the issue of respondent’s claim
of illegal dismissal.
RULING:
The Court held that the decision of Labor Arbiter
and dismissal of petitioner’s appeal by the NLRC
should be set aside for lack of jurisdiction.
Respondent held his position by virtue being
elected by the Bank’s Board of Directors and lost it
when he was not re-elected; thus, his position was
that of an elective corporate office.
RULING:
The Court, citing the case of PSBA vs. Leaño:
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.
RULING:
The Court stated that the heart of the matter was
the validity of the Stockholder’s meeting which
elected the new BOD. Being in the nature of an
intra-corporate dispute, it should fall under the
purview of the Securities and Exchange Commission
and not of the Labor Arbiter.
Respondent’s termination as Bank Manager was
not a simple labor problem but a corporate
controversy in contemplation of the Corporation
Code.