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Republic of
the Philippines Supreme
Court Manila
THIRD DIVISION
BRION, J.: |
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Through a petition for review on certiorari,[1] petitioner Arsenio Z. Locsin (Locsin)
seeks the reversal of the Decision[2] of the Court of
Appeals (CA) dated August 28, 2008,[3]
in “Arsenio Z. Locsin v. Nissan Car Lease
Phils., Inc. and Luis Banson,” docketed as CA-G.R. SP No. 103720 and the
Resolution dated December 9, 2008,[4] denying Locsin’s
Motion for Reconsideration. The assailed
ruling of the CA reversed and set aside the Decision[5] of the Hon. Labor
Arbiter Thelma Concepcion (Labor Arbiter
Concepcion) which denied Nissan Lease Phils. Inc.’s (NCLPI) and Luis T. Banson’s (Banson)
Motion to Dismiss.
On January 1, 1992, Locsin was elected Executive Vice
President and Treasurer (EVP/Treasurer)
of NCLPI. As EVP/Treasurer, his duties
and responsibilities included: (1) the management of the finances of the
company; (2) carrying out the directions of the President and/or the Board of
Directors regarding financial management; and (3) the preparation of financial
reports to advise the officers and directors of the financial condition of
NCLPI.[6] Locsin held this position for 13 years,
having been re-elected every year since 1992, until January 21, 2005, when he
was nominated and elected Chairman of NCLPI’s Board of Directors.[7]
On August 5, 2005, a little over seven (7) months after his
election as Chairman of the Board, the NCLPI Board held a special meeting at
the Manila Polo Club. One of the items
of the agenda was the election of a new set of officers. Unfortunately, Locsin was neither re-elected
Chairman nor reinstated to his previous position as EVP/Treasurer.[8]
Aggrieved, on June 19, 2007, Locsin
filed a complaint for illegal dismissal with prayer for reinstatement, payment
of backwages, damages and attorney’s fees before the Labor Arbiter against
NCLPI and Banson, who was then President of NCLPI.[9]
The Compulsory Arbitration Proceedings
before the Labor Arbiter.
On July 11, 2007, instead of filing
their position paper, NCLPI and Banson filed a Motion to Dismiss,[10]
on the ground that the Labor Arbiter did not have jurisdiction over the case
since the issue of Locsin’s removal as EVP/Treasurer involves an
intra-corporate dispute.
On August 16, 2007, Locsin submitted his opposition to the
motion to dismiss, maintaining his position that he is an employee of
NCLPI.
On March 10, 2008, Labor Arbiter Concepcion issued an Order
denying the Motion to Dismiss, holding that her office acquired “jurisdiction
to arbitrate and/or decide the instant complaint finding extant in the case an
employer-employee relationship.”[11]
NCLPI, on June 3, 2008, elevated the case to the CA through a
Petition for Certiorari under Rule 65
of the Rules of Court.[12] NCLPI raised the issue on whether the Labor
Arbiter committed grave abuse of discretion by denying the Motion to Dismiss
and holding that her office had jurisdiction over the dispute.
The CA Decision - Locsin was a corporate
officer; the issue of his removal as EVP/Treasurer is an intra-corporate
dispute under the RTC’s jurisdiction.
On August 28, 2008,[13] the CA reversed
and set aside the Labor Arbiter’s Order denying the Motion to Dismiss and ruled
that Locsin was a corporate officer.
Citing PD 902-A, the CA defined “corporate officers as those
officers of a corporation who are given that character either by the
Corporation Code or by the corporations’ by-laws.” In this regard, the CA held:
Scrutinizing the
records, We hold that petitioners successfully discharged their onus of establishing that private
respondent was a corporate officer who held the position of Executive
Vice-President/Treasurer as provided in the by-laws of petitioner corporation
and that he held such position by virtue of election by the Board of Directors.
That private
respondent is a corporate officer cannot be disputed. The position of Executive
Vice-President/Treasurer is specifically included in the roster of officers
provided for by the (Amended) By-Laws of petitioner corporation, his duties and
responsibilities, as well as compensation as such officer are likewise set
forth therein.[14]
Article 280 of the Labor Code, the receipt of salaries by
Locsin, SSS deductions on that salary, and the element of control in the
performance of work duties – indicia used by the Labor Arbiter to conclude that
Locsin was a regular employee – were held inapplicable by the CA.[15] The CA noted the Labor Arbiter’s failure to
address the fact that the position of EVP/Treasurer is specifically enumerated
as an “office” in the corporation’s by-laws.[16]
Further, the CA pointed out Locsin’s failure to “state any
circumstance by which NCLPI engaged his services as a corporate officer that
would make him an employee.” The CA
found, in this regard, that Locsin’s assumption and retention as EVP/Treasurer
was based on his election and subsequent re-elections from 1992 until
2005. Further, he performed only those
functions that were “specifically set forth in the By-Laws or required of him
by the Board of Directors.[17]”
With respect to the suit Locsin filed
with the Labor Arbiter, the CA held that:
Private
respondent, in belatedly filing this suit before the Labor Arbiter, questioned
the legality of his “dismissal” but in
essence, he raises the issue of whether or not the Board of Directors had the
authority to remove him from the corporate office to which he was elected
pursuant to the By-Laws of the petitioner corporation. Indeed, had private respondent been an
ordinary employee, an election conducted by the Board of Directors would not
have been necessary to remove him as Executive Vice-President/Treasurer. However, in an obvious attempt to preclude
the application of settled jurisprudence that corporate officers whose position
is provided in the by-laws, their election, removal or dismissal is subject to
Section 5 of P.D. No. 902-A (now R.A. No. 8799), private respondent would even
claim in his Position Paper, that since his responsibilities were akin to that
of the company’s Executive Vice-President/Treasurer, he was “hired under the
pretext that he was being ‘elected’ into said post.[18] [Emphasis supplied.]
As a consequence, the CA concluded that Locsin does not have
any recourse with the Labor Arbiter or the NLRC since the removal of a
corporate officer, whether elected or appointed, is an intra-corporate
controversy over which the NLRC has no jurisdiction.[19] Instead, according to the CA, Locsin’s
complaint for “illegal dismissal” should have been filed in the Regional Trial
Court (RTC), pursuant to Rule 6 of the Interim Rules of Procedure
Governing Intra-Corporate Controversies.[20]
Finally, the CA addressed Locsin’s invocation of Article 4 of
the Labor Code. Dismissing the
application of the provision, the CA cited Dean Cesar Villanueva of the Ateneo
School of Law, as follows:
x x
x the non-coverage of corporate officers from the security of tenure clause
under the Constitution is now well-established principle by numerous
decisions upholding such doctrine under the aegis of the 1987 Constitution in
the face of contemporary decisions of the same Supreme Court likewise
confirming that security of tenure covers all employees or workers including
managerial employees.[21]
Failing to obtain a reconsideration of the CA’s decision,
Locsin filed the present petition on January 28, 2009, raising the following
procedural and substantive issues:
(1)
Whether the CA has original jurisdiction to review decision
of the Labor Arbiter under Rule 65?
(2)
Whether he is a regular employee of NCLPI under the
definition of Article 280 of the Labor Code? and
(3)
Whether Locsin’s position as Executive
Vice-President/Treasurer makes him a corporate officer thereby excluding him
from the coverage of the Labor Code?
Procedurally, Locsin essentially submits
that NCLPI wrongfully filed a petition for certiorari
before the CA, as the latter’s remedy is to proceed with the arbitration,
and to appeal to the NLRC after the Labor Arbiter shall have ruled on the
merits of the case. Locsin cites, in
this regard, Rule V, Section 6 of the Revised Rules of the National Labor
Relations Commission (NLRC Rules),
which provides that a denial of a motion to dismiss by the Labor Arbiter is not
subject to an appeal. Locsin also argues that even if the Labor Arbiter
committed grave abuse of discretion in denying the NCLPI motion, a special
civil action for certiorari, filed with the CA was not the
appropriate remedy, since this was a breach of the doctrine of exhaustion of
administrative remedies.
Substantively, Locsin submits that he
is a regular employee of NCLPI since - as he argued before the Labor Arbiter
and the CA - his relationship with the company meets the “four-fold test.”
First, Locsin contends that NCLPI
had the power to engage his services as EVP/Treasurer. Second,
he received regular wages from NCLPI, from which his SSS and Philhealth
contributions, as well as his withholding taxes were deducted. Third, NCLPI
had the power to terminate his employment.[22] Lastly,
Nissan had control over the manner of the performance of his functions as
EVP/Treasurer, as shown by the 13 years of faithful execution of his job, which
he carried out in accordance with the standards and expectations set by NCLPI.[23] Further, Locsin maintains that even after his
election as Chairman, he essentially performed the functions of EVP/Treasurer –
handling the financial and administrative operations of the Corporation – thus
making him a regular employee.[24]
Under these claimed facts, Locsin concludes that the Labor
Arbiter and the NLRC – not the RTC (as NCLPI posits) – has jurisdiction to
decide the controversy. Parenthetically,
Locsin clarifies that he does not dispute the validity of his election as
Chairman of the Board on January 1, 2005.
Instead, he theorizes that he never lost his position as EVP/Treasurer
having continuously performed the functions appurtenant thereto.[25] Thus, he questions his “unceremonious
removal” as EVP/Treasurer during the August 5, 2005 special Board meeting.
THE
RESPONDENT’S ARGUMENTS
It its April 17, 2009 Comment,[26]
Nissan prays for the denial of the petition for lack of merit. Nissan submits that the CA correctly ruled
that the Labor Arbiter does not have jurisdiction over Locsin’s complaint for
illegal dismissal. In support, Nissan
maintains that Locsin is a corporate officer and not an employee. In addressing
the procedural defect Locsin raised, Nissan brushes the issue aside, stating
that (1) this issue was belatedly raised in the Motion for Reconsideration, and
that (2) in any case, Rule VI, Section 2(1) of the NLRC does not apply since
only appealable decisions,
resolutions and orders are covered under the rule.
We
resolve to deny the petition for lack of merit.
At the outset, we stress that there are two (2) important
considerations in the final determination of this case. On the one hand, Locsin raises a procedural
issue that, if proven correct, will require the Court to dismiss the instant
petition for using an improper remedy.
On the other hand, there is the substantive issue that will be
disregarded if a strict implementation of the rules of procedure is
upheld.
Prefatorily, we agree with Locsin’s
submission that the NCLPI incorrectly elevated the Labor Arbiter’s denial of
the Motion to Dismiss to the CA. Locsin
is correct in positing that the denial of a motion to dismiss is unappealable.
As a general rule, an aggrieved party’s proper recourse to the denial is to
file his position paper, interpose the grounds relied upon in the motion to
dismiss before the labor arbiter, and actively participate in the proceedings.
Thereafter, the labor arbiter’s decision can be appealed to the NLRC, not to
the CA.
As a rule, we strictly adhere to the rules of procedure and
do everything we can, to the point of penalizing violators, to encourage
respect for these rules. We take
exception to this general rule, however, when a strict implementation of these
rules would cause substantial injustice to the parties.
We see it appropriate to apply the exception to this case for
the reasons discussed below; hence, we are compelled to go beyond procedure and
rule on the merits of the case. In the
context of this case, we see sufficient justification to rule on the
employer-employee relationship issue raised by NCLPI, even though the Labor
Arbiter’s interlocutory order was incorrectly
brought to the CA under Rule 65.
The NLRC Rules are clear: the denial by the labor
arbiter of the motion to dismiss is not appealable because the denial is merely
an interlocutory order.
In Metro Drug v.
Metro Drug Employees,[27] we definitively stated that the denial
of a motion to dismiss by a labor arbiter is not immediately appealable.[28]
We similarly ruled in Texon Manufacturing v. Millena,[29] in Sime
Darby Employees Association v. National Labor Relations Commission[30]
and in Westmont Pharmaceuticals v.
Samaniego.[31] In Texon,
we specifically said:
The Order of the Labor Arbiter denying petitioners’
motion to dismiss is interlocutory. It is well-settled that a denial of a motion to dismiss a complaint
is an interlocutory order and hence, cannot
be appealed, until a final judgment on the merits of the case is rendered.
[Emphasis supplied.][32]
and indicated the
appropriate recourse in Metro Drug,
as follows:[33]
x x x The NLRC rule proscribing appeal from a denial
of a motion to dismiss is similar to the general rule observed in civil
procedure that an order denying a motion to dismiss is interlocutory and,
hence, not appealable until final judgment or order is rendered [1 Feria and Noche, Civil Procedure Annotated 453 (2001 ed.)]. The remedy of the
aggrieved party in case of denial of the motion to dismiss is to file an answer and interpose, as a defense
or defenses, the ground or grounds relied upon in the motion to dismiss,
proceed to trial and, in case of adverse judgment, to elevate the entire case
by appeal in due course [Mendoza v.
Court of Appeals, G.R. No. 81909, September 5, 1991, 201 SCRA 343]. In order to avail of the
extraordinary writ of certiorari, it is incumbent upon petitioner to
establish that the denial of the motion to dismiss was tainted with grave abuse
of discretion. [Macawiwili Gold Mining
and Development Co., Inc. v. Court of Appeals, G.R. No. 115104, October 12,
1998, 297 SCRA 602]
In so citing Feria and Noche, the Court was referring to Sec. 1 (b), Rule 41 of the Rules
of Court, which specifically enumerates interlocutory
orders as one of the court actions that cannot be appealed. In the same rule, as amended by A.M. No.
07-7-12-SC, the aggrieved party is allowed to file an appropriate special civil
action under Rule 65. The latter rule,
however, also contains limitations for its application, clearly outlined in its
Section 1 which provides:
Section 1. Petition for certiorari.
When any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in excess
of its or his jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction, and there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting such incidental
reliefs as law and justice may require.
In the labor law setting,
a plain, speedy and adequate remedy is still open to the aggrieved party when a
labor arbiter denies a motion to dismiss. This is Article 223 of Presidential
Decree No. 442, as amended (Labor Code), [34]
which states:
ART. 223. APPEAL
Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; x x x [Emphasis supplied.]
Pursuant to this Article, we held in Metro Drug (citing Air Services Cooperative, et al. v. Court of Appeals[35])
that the NLRC is clothed with sufficient authority to correct any claimed
“erroneous assumption of jurisdiction” by labor arbiters:
In Air Services Cooperative, et al. v. The Court of Appeals, et al., a case where the jurisdiction of the labor arbiter was put in issue and was assailed through a petition for certiorari, prohibition and annulment of judgment before a regional trial court, this Court had the opportunity to expound on the nature of appeal as embodied in Article 223 of the Labor Code, thus:
x x x Also, while the title of the Article 223 seems to provide only for the remedy of appeal as that term is understood in procedural law and as distinguished from the office of certiorari, nonetheless, a closer reading thereof reveals that it is not as limited as understood by the petitioners x x x.
Abuse of discretion is admittedly within the ambit of certiorari and its grant of review thereof to the NLRC indicates the lawmakers’ intention to broaden the meaning of appeal as that term is used in the Code. For this reason, petitioners cannot argue now that the NLRC is devoid of any corrective power to rectify a supposed erroneous assumption of jurisdiction by the Labor Arbiter x x x. [Air Services Cooperative, et al. v. The Court of Appeals, et al. G.R. No. 118693, 23 July 1998, 293 SCRA 101]
Since the legislature had clothed the NLRC with the appellate authority to correct a claimed “erroneous assumption of jurisdiction” on the part of the labor arbiter – a case of grave abuse of discretion - the remedy availed of by petitioner in this case is patently erroneous as recourse in this case is lodged, under the law, with the NLRC.
In Metro Drug, as in the present case, the defect imputed through the
NCLPI Motion to Dismiss is the labor arbiter’s lack of jurisdiction since
Locsin is alleged to be a corporate officer, not an employee. Parallelisms between
the two cases is undeniable, as they are similar on the following points: (1)
in Metro Drug, as in this case, the
Labor Arbiter issued an Order denying the Motion to Dismiss by one of the
parties; (2) the basis of the Motion to Dismiss is also the alleged lack of
jurisdiction by the Labor Arbiter to settle the dispute; and (3) dissatisfied
with the Order of the Labor Arbiter, the aggrieved party likewise elevated the
case to the CA via Rule 65.
The similarities end there, however. Unlike in the present case, the CA denied the
petition for certiorari and the
subsequent Motion for Reconsideration in Metro
Drug; the CA correctly found that the proper appellate mechanism was an
appeal to the NLRC and not a petition for certiorari
under Rule 65. In the present case, the
CA took a different position despite our clear ruling in Metro Drug, and allowed, not only the use of Rule 65, but also
ruled on the merits.
From this perspective, the CA clearly erred in the
application of the procedural rules by disregarding the relevant provisions of
the NLRC Rules, as well as the requirements for a petition for certiorari under
the Rules of Court. To reiterate, the
proper action of an aggrieved party faced with the labor arbiter’s denial of
his motion to dismiss is to submit his position paper and raise therein the
supposed lack of jurisdiction. The
aggrieved party cannot immediately appeal the denial since it is an
interlocutory order; the appropriate remedial recourse is the procedure
outlined in Article 223 of the Labor Code, not a petition for certiorari under Rule 65.
A strict implementation of the NLRC Rules
and the Rules of Court would cause injustice to the parties because the Labor
Arbiter clearly has no jurisdiction over the present intra-corporate dispute.
Our ruling in Mejillano v. Lucillo[36]
stands for the proposition that we should strictly apply the rules of
procedure. We said:
Time and again, we have ruled that procedural rules do
not exist for the convenience of the litigants.
Rules of Procedure exist for a purpose, and to disregard such rules in
the guise of liberal construction would be to defeat such purpose. Procedural
rules were established primarily to provide order to and enhance the efficiency
of our judicial system. [Emphasis supplied.]
An exception to this rule
is our ruling in Lazaro v. Court of
Appeals[37]
where we held that the strict enforcement of the rules of procedure may be
relaxed in exceptionally meritorious
cases:
x x x
Procedural rules are not to be belittled or dismissed simply because their
non-observance may have resulted in prejudice to a party's substantive rights.
Like all rules, they are required to be
followed except only for the most persuasive of reasons when they may be relaxed
to relieve a litigant of an injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure prescribed. The Court reiterates that rules of procedure, especially
those prescribing the time within which certain acts must be done, "have
oft been held as absolutely indispensable to the prevention of needless delays
and to the orderly and speedy discharge of business. x x x The
reason for rules of this nature is because the dispatch of business by courts
would be impossible, and intolerable delays would result, without rules
governing practice x x x. Such rules are a necessary incident to the
proper, efficient and orderly discharge of judicial functions." Indeed, in no uncertain terms, the Court held that the
said rules may be relaxed only in exceptionally
meritorious cases. [Emphasis supplied.]
Whether a case involves an
exceptionally meritorious circumstance can be tested under the guidelines we
established in Sanchez v. Court of
Appeals,[38]
as follows:
Aside from matters
of life, liberty, honor or property which would warrant the suspension of
the Rules of the most mandatory character and an examination and review by the
appellate court of the lower court’s findings of fact, the other elements that
should be considered are the following: (a) the existence of special or compelling circumstances, (b) the merits of the case, (c) a cause not entirely attributable to the
fault or negligence of the party favored by the suspension of the rules,
(d) a lack of any showing that the
review sought is merely frivolous and dilatory, and (e) the other party will not be unjustly prejudiced
thereby. [Emphasis supplied.]
Under these standards, we hold that exceptional
circumstances exist in the present case to merit the relaxation of the
applicable rules of procedure.
Due to existing exceptional circumstances,
the ruling on the merits that Locsin is an officer and not an employee of
Nissan must take precedence over procedural considerations.
We arrived at the
conclusion that we should go beyond the procedural rules and immediately take a
look at the intrinsic merits of the case based on several considerations.
First, the parties have sufficiently ventilated their positions on
the disputed employer-employee relationship and have, in fact, submitted the
matter for the CA’s consideration.
Second, the CA correctly ruled
that no employer-employee relationship exists between Locsin and Nissan.
Locsin was undeniably
Chairman and President, and was elected to these positions by the Nissan board
pursuant to its By-laws.[39] As such, he was a
corporate officer, not an employee. The
CA reached this conclusion by relying on the submitted facts and on
Presidential Decree 902-A, which defines corporate officers as “those officers
of a corporation who are given that character either by the Corporation Code or
by the corporation’s by-laws.” Likewise, Section 25 of Batas Pambansa Blg. 69,
or the Corporation Code of the Philippines (Corporation
Code) provides that corporate officers are the president, secretary, treasurer
and such other officers as may be
provided for in the by-laws.
Third. Even as Executive
Vice-President/Treasurer, Locsin already acted as a corporate officer because
the position of Executive Vice-President/Treasurer is provided for in Nissan’s
By-Laws. Article IV, Section 4 of these
By-Laws specifically provides for this position, as follows:
ARTICLE IV
Officers
Section 1. Election and Appointment – The Board of
Directors at their first meeting, annually thereafter, shall elect as officers
of the Corporation a Chairman of the Board, a President, an Executive Vice-President/Treasurer, a Vice-President/General
Manager and a Corporate Secretary. The
other Senior Operating Officers of the Corporation shall be appointed by the
Board upon the recommendation of the President.
x
x x x
Section 4. Executive Vice-President/Treasurer – The
Executive Vice-President/Treasurer shall have such powers and perform such
duties as are prescribed by these By-Laws, and as may be required of him by the
Board of Directors. As the concurrent
Treasurer of the Corporation, he shall have the charge of the funds,
securities, receipts, and disbursements of the Corporation. He shall deposit, or cause to be deposited,
the credit of the Corporation in such banks or trust companies, or with such
banks of other depositories, as the Board of Directors may from time to time
designate. He shall tender to the
President or to the Board of Directors whenever required an account of the
financial condition of the corporation and of all his transactions as
Treasurer. As soon as practicable after
the close of each fiscal year, he shall make and submit to the Board of
Directors a like report of such fiscal year.
He shall keep correct books of account of all the business and
transactions of the Corporation.
In Okol v. Slimmers
World International,[40] citing Tabang v. National Labor Relations
Commission,[41]
we held that –
x x x an
“office” is created by the charter of the corporation and the officer is
elected by the directors or stockholders. On the other hand, an
“employee” usually occupies no office and generally is employed not by action
of the directors or stockholders but by the managing officer of the corporation
who also determines the compensation to be paid to such employee. [Emphasis
supplied.]
In this case, Locsin was elected by the NCLPI Board, in
accordance with the Amended By-Laws of
the corporation. The following factual
determination by the CA is elucidating:
More important, private respondent failed to state any
such “circumstance” by which the petitioner corporation “engaged his services”
as corporate officer that would make him an employee. In the first place, the
Vice-President/Treasurer was elected on
an annual basis as provided in the By-Laws, and no duties and responsibilities
were stated by private respondent which he discharged while occupying said
position other than those specifically
set forth in the By-Laws or required of him by the Board of Directors. The unrebutted fact remains that private
respondent held the position of Executive Vice-President/Treasurer of
petitioner corporation, a position provided for in the latter’s by-laws, by
virtue of election by the Board of Directors, and has functioned as such
Executive Vice-President/Treasurer pursuant to the provisions of the said
By-Laws. Private respondent knew very
well that he was simply not re-elected to the said position during the August
5, 2005 board meeting, but he had objected to the election of a new set of
officers held at the time upon the advice of his lawyer that he cannot be
“terminated” or replaced as Executive Vice-President/Treasurer as he had
attained tenurial security.[42]
We fully agree with this factual determination which
we find to be sufficiently supported by evidence. We likewise rule, based on law and
established jurisprudence, that Locsin,
at the time of his severance from NCLPI, was the latter’s corporate officer.
a. The
Question of Jurisdiction
Given Locsin’s status as a corporate officer, the RTC,
not the Labor Arbiter or the NLRC, has jurisdiction to hear the legality of the
termination of his relationship with Nissan.
As we also held in Okol, a
corporate officer’s dismissal from service is an intra-corporate dispute:
In a number of cases [Estrada v. National Labor Relations
Commission, G.R. No. 106722, 4 October 1996, 262 SCRA 709; Lozon
v. National Labor Relations Commission, 310 Phil. 1 (1995); Espino
v. National Labor Relations Commission, 310 Phil. 61 (1995); Fortune
Cement Corporation v. National Labor Relations Commission, G.R. No. 79762,
24 January 1991, 193 SCRA 258], we have held that a corporate officer’s dismissal is always a
corporate act, or an intra-corporate
controversy which arises between a stockholder and a corporation.[43]
[Emphasis supplied.]
so that the RTC should
exercise jurisdiction based on the following legal reasoning:
Prior to its amendment, Section 5(c) of Presidential
Decree No. 902-A (PD 902-A) provided that
intra-corporate disputes fall within the jurisdiction of the Securities and
Exchange Commission (SEC):
Sec. 5. In addition to the regulatory and adjudicative functions of the
Securities and Exchange Commission over corporations, partnerships and other
forms of associations registered with it as expressly granted under existing
laws and decrees, it shall have original and exclusive jurisdiction to hear and
decide cases involving:
x x x x
c) Controversies in the election or appointments of directors, trustees,
officers or managers of such corporations, partnerships or associations.
Subsection
5.2, Section 5 of Republic Act No. 8799, which took effect on 8 August 2000,
transferred to regional trial courts the SEC’s jurisdiction over all cases
listed in Section 5 of PD 902-A:
5.2. The Commission’s jurisdiction over all cases enumerated under Section 5 of
Presidential Decree No. 902-A is hereby transferred to the Courts of general
jurisdiction or the appropriate Regional
Trial Court. [Emphasis supplied.]
b. Precedence
of Substantive Merits;
Primacy of Element of Jurisdiction
Based on the above jurisdictional considerations, we would
be forced to remand the case to the Labor Arbiter for further proceedings if we
were to dismiss the petition outright due to the wrongful use of Rule 65.[44] We cannot close our eyes, however, to the
factual and legal reality, established by evidence already on record, that
Locsin is a corporate officer whose termination of relationship is outside a
labor arbiter’s jurisdiction to rule upon.
Under these circumstances, we have to give precedence to the merits of the case, and primacy to
the element of jurisdiction. Jurisdiction is the power to hear and rule on a
case and is the threshold element that must exist before any quasi-judicial
officer can act. In the context of the
present case, the Labor Arbiter does not have jurisdiction over the termination
dispute Locsin brought, and should not be allowed to continue to act on the
case after the absence of jurisdiction has become obvious, based on the records
and the law. In more practical
terms, a contrary ruling will only cause substantial delay and inconvenience as
well as unnecessary expenses, to the point of injustice, to the parties. This
conclusion, of course, does not go into the merits of termination of
relationship and is without prejudice to the filing of an intra-corporate
dispute on this point before the appropriate RTC.
WHEREFORE, we DISMISS the petitioner’s petition for
review on certiorari, and AFFIRM the Decision of the Court of
Appeals, in CA-G.R. SP No. 103720, promulgated on August 28, 2008, as well as
its Resolution of December 9, 2008, which reversed and set aside the March 10,
2008 Order of Labor Arbiter Concepcion in NLRC NCR Case No.
00-06-06165-07. This Decision is without prejudice to
petitioner Locsin’s available recourse for relief through the appropriate
remedy in the proper forum.
No pronouncement as to costs.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
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ANTONIO EDUARDO B. NACHURA Associate Justice |
JOSE
CATRAL MENDOZA Associate Justice |
MARIA LOURDES P.A. SERENO
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
ARTURO D. BRION
Associate Justice
Acting Chairperson
CERTIFICATION
RENATO
C. CORONA
Chief Justice
*
Designated Additional Member of the Third
Division, per Raffle dated October 20, 2010.
**
Designated Additional Member of the Third Division, per Special Order No. 907
dated October 13, 2010.
***Designated
Acting Chairperson of the Third Division, per Special Order No. 906 dated
October 13, 2010.
****Designated
Additional Member of the Third Division, per Special Order No. 911 dated
October 15, 2010.
[1] Filed
under Rule 45 of the Rules of Court, rollo
p. 9.
[2] Penned by Associate Justice Martin S. Villarama, Jr. (now a member
of this Court), with Associate Justices Noel G. Tijam and Arturo G. Tayag
concurring, id. at 60-73.
[3] Id. at 60.
[4] Id. at 75.
[5] Dated March 10, 2008, id. at 268.
[6] Id. at 227.
[7] Id. at
212.
[8] Id. at 215-216.
[9] Id. at 100-101.
[10] Id. at 105-117.
[11] Id. at 269.
[12] Id. at 242-264.
[13] Id. at 60.
[14] Id. at 68.
[15] Id. at 69.
[16] Ibid.
[17] Id. at 70.
[18] Id. at 70.
[19] Id. at 71, citing Paguio v. National
Labor Relations Commission, G.R. No. 116662, February 1, 1996, 253 SCRA
166.
[20] A.M. No. 01-2-04-SC.
[21] Cesar L. Villanueva,
Philippine Corporate Law 358 (2001).
[22] Rollo,
p. 31.
[23] Id. at 32.
[24] Ibid.
[25] Id. at 42.
[26] Id. at 461-493.
[27] G.R. No. 142666, September 26, 2005, 471
SCRA 45.
[28] Id. at 56.
[29] G.R. No. 141380, April 14, 2004, 427 SCRA 377.
[32] Supra note 29, at 383.
[33] Supra note 27, at 56.
[34] Cited in Metro Drug, id.
[35] G.R. No. 118693, July 23, 1998, 293 SCRA 101.
[36] G.R. No. 154717, June 19, 2009, 590 SCRA 1, 9.
[37] G.R. No. 137761, April 6, 2000, 330 SCRA 208, 214.
[38] G.R. No. 152766, June 20, 2003, 404 SCRA 540, 546.
[39] Rollo, p. 212.
[40] G.R. No. 160146, December 11, 2009, 608 SCRA
97.
[41]
G.R. No. 121143, January 21, 1997, 266 SCRA 462, 467.
[42] Rollo, p. 70.
[43] Supra note 40.
[44] Supra note 27, at 59.