Republic of the
Supreme Court
FIRST DIVISION
RENATO REAL, |
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G.R. No. 168757 |
Petitioner, |
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Present: |
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- versus- |
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VELASCO, JR., |
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LEONARDO-DE CASTRO, |
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PEREZ, JJ. |
SANGU PHILIPPINES, INC. and/ or KIICHI ABE, |
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Promulgated: |
Respondents. |
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January 19, 2011 |
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D E C I S I O N
The perennial question of whether a complaint
for illegal dismissal is intra-corporate and thus beyond the jurisdiction of
the Labor Arbiter is the core issue up for consideration in this case.
This Petition for Review on Certiorari
assails the Decision[1]
dated June 28, 2005 of the Court of Appeals (CA) in CA-G.R. SP. No. 86017 which
dismissed the petition for certiorari filed before it.
Factual Antecedents
Petitioner Renato Real was the
Manager of respondent corporation Sangu Philippines, Inc., a corporation
engaged in the business of providing manpower for general services, like
janitors, janitresses and other maintenance personnel, to various clients. In 2001, petitioner, together with 29 others
who were either janitors, janitresses, leadmen and maintenance men, all employed
by respondent corporation, filed their respective Complaints[2]
for illegal dismissal against the latter and respondent Kiichi Abe, the
corporation’s Vice-President and General Manager. These complaints were later on consolidated.
With regard to petitioner, he was removed
from his position as Manager through Board Resolution 2001-03[3]
adopted by respondent corporation’s Board of Directors. Petitioner complained that he was neither
notified of the Board Meeting during which said board resolution was passed nor
formally charged with any infraction. He
just received from respondents a letter[4]
dated March 26, 2001 stating that he has been terminated from service effective
March 25, 2001 for the following reasons: (1) continuous absences at his post
at Ogino Philippines Inc. for several months which was detrimental to the corporation’s
operation; (2) loss of trust and confidence; and, (3) to cut down operational
expenses to reduce further losses being experienced by respondent corporation.
Respondents, on the other hand,
refuted petitioner’s claim of illegal dismissal by alleging that after
petitioner was appointed Manager, he committed gross acts of misconduct
detrimental to the company since 2000.
According to them, petitioner would almost always absent himself from
work without informing the corporation of his whereabouts and that he would
come to the office only to collect his salaries. As he was almost always absent, petitioner
neglected to supervise the employees resulting in complaints from various
clients about employees’ performance. In
one instance, petitioner together with a few others, while apparently drunk,
went to the premises of one of respondents’ clients, Epson Precision (Phils.)
Inc., and engaged in a heated argument with the employees therein. Because of this, respondent Abe allegedly
received a complaint from Epson’s Personnel Manager concerning petitioner’s
conduct. Respondents likewise averred
that petitioner established a company engaged in the same business as
respondent corporation’s and even submitted proposals for janitorial services
to two of the latter’s clients. Because
of all these, the Board of Directors of respondent corporation met on March 24,
2001 and adopted Board Resolution No. 2001-03 removing petitioner as Manager. Petitioner was thereafter informed of his
removal through a letter dated
Further, in what respondents believed
to be an act of retaliation, petitioner allegedly encouraged the employees who
had been placed in the manpower pool to file a complaint for illegal dismissal
against respondents. Worse, he later
incited those assigned in Epson Precision (Phils.) Inc., Ogino Philippines
Corporation, Hitachi Cable Philippines Inc. and Philippine TRC Inc. to stage a
strike on
Rulings of the
Labor Arbiter and the National Labor Relations Commission
The Labor Arbiter in a Decision[5]
dated June 5, 2003 declared petitioner and his co-complainants as having been
illegally dismissed and ordered respondents to reinstate complainants to their
former positions without loss of seniority rights and other privileges and to
pay their full backwages from the time of their dismissal until actually
reinstated and furthermore, to pay them attorney’s fees. The Labor Arbiter found no convincing proof
of the causes for which petitioner was terminated and noted that there was
complete absence of due process in the manner of his termination.
Respondents thus appealed to the
National Labor Relations Commission (NLRC) and raised therein as one of the
issues the lack of jurisdiction of the Labor Arbiter over petitioner’s
complaint. Respondents claimed that
petitioner is both a stockholder and a corporate officer of respondent
corporation, hence, his action against respondents is an intra-corporate
controversy over which the Labor Arbiter has no jurisdiction.
The NLRC found
such contention of respondents to be meritorious. Aside from petitioner’s own admission in the
pleadings that he is a stockholder and at the same time occupying a managerial
position, the NLRC also gave weight to the corporation’s General Information
Sheet[6]
(GIS) dated October 27, 1999 listing petitioner as one of its stockholders,
consequently his termination had to be effected through a board resolution. These, the NLRC opined, clearly established
petitioner’s status as a stockholder and as a corporate officer and hence, his
action against respondent corporation is an intra-corporate controversy over
which the Labor Arbiter has no jurisdiction.
As to the other complainants, the NLRC ruled that there was no dismissal. The NLRC however, modified the appealed decision
of the Labor Arbiter in a Decision[7]
dated February 13, 2004, the dispositive portion of which reads:
WHEREFORE, all foregoing premises considered, the
appealed Decision dated June 5, 2003 is hereby MODIFIED. Accordingly, judgment is hereby rendered
DISMISSING the complaint of Renato Real for lack of jurisdiction. As to the rest of the complainants, they are
hereby ordered to immediately report back to work but without the payment of
backwages.
All other claims against respondents including
attorney’s fees are DISMISSED for lack of merit.
SO ORDERED.
Still joined by his co-complainants,
petitioner brought the case to the CA by way of petition for certiorari.
Ruling of the Court
of Appeals
Before the CA,
petitioner imputed upon the NLRC grave abuse of discretion amounting to lack or
excess of jurisdiction in declaring him a corporate officer and in holding that
his action against respondents is an intra-corporate controversy and thus beyond
the jurisdiction of the Labor Arbiter.
While admitting that he is indeed a
stockholder of respondent corporation, petitioner nevertheless disputed the declaration
of the NLRC that he is a corporate officer thereof. He posited that his being a stockholder and his
being a managerial employee do not ipso facto confer upon him the status
of a corporate officer. To support this
contention, petitioner called the CA’s attention to the same GIS relied upon by
the NLRC when it declared him to be a corporate officer. He pointed out that although said information
sheet clearly indicates that he is a stockholder of respondent corporation, he
is not an officer thereof as shown by the entry “N/A” or “not applicable”
opposite his name in the officer column.
Said column requires that the particular position be indicated if the
person is an officer and if not, the entry “N/A”. Petitioner further argued that the fact that
his dismissal was effected through a board resolution does not likewise mean
that he is a corporate officer.
Otherwise, all that an employer has to do in order to avoid compliance
with the requisites of a valid dismissal under the Labor Code is to dismiss a
managerial employee through a board resolution.
Moreover, he insisted that his action for illegal dismissal is not an
intra-corporate controversy as same stemmed from employee-employer relationship
which is well within the jurisdiction of the Labor Arbiter. This can be deduced and is bolstered by the
last paragraph of the termination letter sent to him by respondents stating
that he is entitled to benefits under the Labor Code, to wit:
In this connection (his dismissal) you are
entitled to separation pay and other benefits provided for under the Labor
Code of the
In contrast,
respondents stood firm that the action against them is an intra-corporate
controversy. It cited Tabang v. National
Labor Relations Commission[9] wherein this
Court declared that “an intra-corporate controversy is one which arises between
a stockholder and the corporation;” that “[t]here is no distinction,
qualification, nor any exemption whatsoever;” and that it is “broad and covers
all kinds of controversies between stockholders and corporations.” In view of this ruling and since petitioner is
undisputedly a stockholder of the corporation, respondents contended that the
action instituted by petitioner against them is an intra-corporate controversy
cognizable only by the appropriate regional trial court. Hence, the NLRC correctly dismissed
petitioner’s complaint for lack of jurisdiction.
In the assailed Decision[10]
dated June 28, 2005, the CA sided with respondents and affirmed the NLRC’s
finding that aside from being a stockholder of respondent corporation, petitioner
is also a corporate officer thereof and consequently, his complaint is an
intra-corporate controversy over which the labor arbiter has no jurisdiction. Said court opined that if it was true that
petitioner is a mere employee, the respondent corporation would not have called
a board meeting to pass a resolution for petitioner’s dismissal considering
that it was very tedious for the Board of Directors to convene and to adopt a
resolution every time they decide to dismiss their managerial employees. To support its finding, the CA likewise cited
Tabang. As to petitioner’s
co-complainants, the CA likewise
affirmed the NLRC’S finding that they were never dismissed from the service. The dispositive portion of the CA Decision
reads:
WHEREFORE, the instant petition is hereby
DISMISSED. Accordingly, the assailed
decision and resolution of the public respondent National Labor Relations
Commission in NLRC NCR CA No. 036128-03 NLRC SRAB-IV-05-6618-01-B/05-6619-02-B/05-6620-02-B/10-6637-01-B/10-6833-01-B,
STANDS.
SO ORDERED.
Now alone but still undeterred,
petitioner elevated the case to us through this Petition for Review on Certiorari.
The Parties’
Arguments
Petitioner continues to insist that
he is not a corporate officer. He argues
that a corporate officer is one who holds an elective position as provided in
the Articles of Incorporation or one who is appointed to such other positions by
the Board of Directors as specifically authorized by its By-Laws. And, since he was neither elected nor is there
any showing that he was appointed by the Board of Directors to his position as
Manager, petitioner maintains that he is not a corporate officer contrary to
the findings of the NLRC and the CA.
Petitioner likewise
contends that his complaint for illegal dismissal against respondents is not an
intra-corporate controversy. He avers
that for an action or suit between a stockholder and a corporation to be considered
an intra-corporate controversy, same must arise from intra-corporate relations,
i.e., an action involving the status of a stockholder as such. He believes that his action against the
respondents does not arise from intra-corporate relations but rather from
employer-employee relations. This,
according to him, was even impliedly recognized by respondents as shown by the earlier
quoted portion of the termination letter they sent to him.
For their part, respondents posit
that what petitioner is essentially assailing before this Court is the finding
of the NLRC and the CA that he is a corporate officer of respondent
corporation. To the respondents, the
question of whether petitioner is a corporate officer is a question of fact
which, as held in a long line of jurisprudence, cannot be the subject of review
under this Petition for Review on Certiorari. At any rate, respondents insist that
petitioner who is undisputedly a stockholder of respondent corporation is
likewise a corporate officer and that his action against them is an
intra-corporate dispute beyond the jurisdiction of the labor tribunals. To support this, they cited several jurisprudence
such as Pearson & George (S.E. Asia), Inc. v. National Labor Relations
Commission,[11] Philippine
School of Business Administration v. Leano,[12] Fortune Cement
Corporation v. National Labor Relations Commission[13] and again, Tabang
v. National Labor Relations Commission.[14]
Moreover,
in an attempt to demolish petitioner’s claim that the present controversy concerns
employer-employee relations, respondents enumerated the following facts and
circumstances: (1) Petitioner was an incorporator, stockholder and manager of
respondent company; (2) As an incorporator, he was one of only seven
incorporators of respondent corporation and one of only four Filipino members
of the Board of Directors; (3) As stockholder, he has One Thousand (1,000) of
the Ten Thousand Eight Hundred (10,800) common shares held by Filipino
stockholders, with a par-value of One Hundred Thousand Pesos (P100,000.00);
(4) His appointment as manager was by
virtue of Section 1, Article IV of respondent corporation’s By-Laws; (5) As
manager, he had direct management and authority over all of respondent
corporation’s skilled employees; (6) Petitioner has shown himself to be an
incompetent manager, unable to properly supervise the employees and even
causing friction with the corporation’s clients by engaging in unruly behavior
while in client’s premises; (7) As if his incompetence was not enough, in a
blatant and palpable act of disloyalty, he established another company engaged
in the same line of business as respondent corporation; (8) Because of these
acts of incompetence and disloyalty, respondent corporation through a
Resolution adopted by its Board of Directors was finally constrained to remove
petitioner as Manager and declare his office vacant; (9) After his removal,
petitioner urged the employees under him to stage an unlawful strike by leading
them to believe that they have been illegally dismissed from employment.[15]
Apparently, respondents intended to show
from this enumeration that petitioner’s removal pertains to his relationship
with respondent corporation, that is, his utter failure to advance its interest
and the prejudice caused by his acts of disloyalty. For this reason, respondents see the action
against them not as a case between an employer and an employee as what petitioner
alleges, but one by an officer and at same time a major stockholder seeking to
be reinstated to his former office against the corporation that declared his
position vacant.
Finally, respondents
state that the fact that petitioner is being given benefits under the Labor
Code as stated in his termination letter does not mean that they are
recognizing the employer-employee relations between them. They explain that the benefits provided under
the Labor Code were merely made by respondent corporation as the basis in
determining petitioner’s compensation package and that same are merely part of
the perquisites of petitioner’s office as a director and manager. It does not and it cannot change the
intra-corporate nature of the controversy.
Hence, respondents pray that this petition be dismissed for lack of
merit.
Issues
From the foregoing and as earlier mentioned, the core issue to be
resolved in this case is whether petitioner’s complaint for illegal dismissal
constitutes an intra-corporate controversy and thus, beyond the jurisdiction of
the Labor Arbiter.
Our Ruling
Two-tier test in determining the
existence of intra-corporate controversy
Respondents
strongly rely on this Court’s pronouncement in the 1997 case of Tabang v. National
Labor Relations Commission, to wit:
[A]n intra-corporate controversy is one which
arises between a stockholder and the corporation. There is no distinction, qualification nor
any exemption whatsoever. The provision is broad and covers all kinds of
controversies between stockholders and corporations.[16]
In view of this, respondents
contend that even if petitioner challenges his being a corporate officer, the
present case still constitutes an intra-corporate controversy as petitioner is
undisputedly a stockholder and a director of respondent corporation.
It is
worthy to note, however, that before the promulgation of the Tabang
case, the Court provided in Mainland Construction Co., Inc. v. Movilla[17] a “better
policy” in determining which between the Securities and Exchange Commission
(SEC) and the Labor Arbiter has jurisdiction over termination disputes,[18]
or similarly, whether they are intra-corporate or not, viz:
The fact that the parties involved in the
controversy are all stockholders or that the parties involved are the
stockholders and the corporation does not necessarily place the dispute within
the ambit of the jurisdiction of the SEC (now the Regional Trial Court[19]). The better policy to be followed in
determining jurisdiction over a case should be to consider concurrent factors
such as the status or relationship of the parties or the nature of the question
that is subject of their controversy.
In the absence of any one of these factors, the SEC will not have
jurisdiction. Furthermore, it does not
necessarily follow that every conflict between the corporation and its
stockholders would involve such corporate matters as only SEC (now the Regional
Trial Court[20])
can resolve in the exercise of its adjudicatory or quasi-judicial powers. (Emphasis ours)
And, while Tabang
was promulgated later than Mainland Construction Co., Inc., the “better
policy” enunciated in the latter appears to have developed into a standard
approach in classifying what constitutes an intra-corporate controversy. This is explained lengthily in Reyes v.
Regional Trial
Intra-Corporate Controversy
A review of relevant jurisprudence shows a
development in the Court’s approach in classifying what constitutes an
intra-corporate controversy. Initially,
the main consideration in determining whether a dispute constitutes an
intra-corporate controversy was limited to a consideration of the intra-corporate
relationship existing between or among the parties. The types of relationships embraced under
Section 5(b) x x x were as follows:
a)
between the corporation, partnership or association and the public;
b)
between the corporation, partnership or association and its
stockholders, partners, members or officers;
c)
between the corporation, partnership or association and the State as far
as its franchise, permit or license to operate is concerned; and
d)
among the stockholders, partners or associates themselves.
The existence of any of the above intra-corporate
relations was sufficient to confer jurisdiction to the SEC (now the RTC),
regardless of the subject matter of the dispute. This came to be known as the relationship
test.
However, in the 1984 case of DMRC Enterprises
v. Esta del Sol Mountain Reserve, Inc., the Court introduced the nature of
the controversy test. We declared in
this case that it is not the mere existence of an intra-corporate relationship
that gives rise to an intra-corporate controversy; to rely on the relationship
test alone will divest the regular courts of their jurisdiction for the sole
reason that the dispute involves a corporation, its directors, officers, or
stockholders. We saw that there is no
legal sense in disregarding or minimizing the value of the nature of the transactions
which gives rise to the dispute.
Under the nature of the controversy test, the
incidents of that relationship must also be considered for the purpose of
ascertaining whether the controversy itself is intra-corporate. The controversy must not only be rooted in
the existence of an intra-corporate relationship, but must as well pertain to
the enforcement of the parties’ correlative rights and obligations under the
Corporation Code and the internal and intra-corporate regulatory rules of the
corporation. If the relationship and its
incidents are merely incidental to the controversy or if there will still be
conflict even if the relationship does not exist, then no intra-corporate
controversy exists.
The Court then combined the two tests and declared
that jurisdiction should be determined by considering not only the status or
relationship of the parties, but also the nature of the question under
controversy. This two-tier test was
adopted in the recent case of Speed Distribution Inc. v. Court of Appeals:
‘To determine whether
a case involves an intra-corporate controversy, and is to be heard and decided
by the branches of the RTC specifically designated by the Court to try and
decide such cases, two elements must concur: (a) the status or relationship of
the parties, and (2) the nature of the question that is the subject of their
controversy.
The first element
requires that the controversy must arise out of intra-corporate or partnership
relations between any or all of the parties and the corporation, partnership,
or association of which they are not stockholders, members or associates,
between any or all of them and the corporation, partnership or association of
which they are stockholders, members or associates, respectively; and between
such corporation, partnership, or association and the State insofar as it
concerns the individual franchises. The
second element requires that the dispute among the parties be intrinsically
connected with the regulation of the corporation. If the nature of the controversy involves
matters that are purely civil in character, necessarily, the case does not
involve an intra-corporate controversy.’ [Citations omitted.]
Guided by this recent
jurisprudence, we thus find no merit in respondents’ contention that the fact alone
that petitioner is a stockholder and director of respondent corporation
automatically classifies this case as an intra-corporate controversy. To reiterate, not all conflicts between the
stockholders and the corporation are classified as intra-corporate. There are other factors to consider in
determining whether the dispute involves corporate matters as to consider them
as intra-corporate controversies.
What then is the nature of petitioner’s
Complaint for Illegal Dismissal? Is it intra-corporate and thus beyond the
jurisdiction of the Labor Arbiter? We
shall answer this question by using the standards set forth in the Reyes
case.
No intra-corporate relationship
between the parties
As earlier stated, petitioner’s status
as a stockholder and director of respondent corporation is not disputed. What the parties disagree on is the finding
of the NLRC and the CA that petitioner is a corporate officer. An examination of the complaint for illegal
dismissal, however, reveals that the root of the controversy is petitioner’s
dismissal as Manager of respondent corporation, a position which respondents
claim to be a corporate office. Hence, petitioner is involved in this case not
in his capacity as a stockholder or director, but as an alleged corporate
officer. In applying the relationship
test, therefore, it is necessary to determine if petitioner is a corporate
officer of respondent corporation so as to establish the intra-corporate
relationship between the parties. And albeit
respondents claim that the determination of whether petitioner is a corporate
officer is a question of fact which this Court cannot pass upon in this
petition for review on certiorari, we shall nonetheless proceed to consider
the same because such question is not the main issue to be resolved in this
case but is merely collateral to the core issue earlier mentioned.
Petitioner negates his status as a
corporate officer by pointing out that although he was removed as Manager
through a board resolution, he was never elected to said position nor was he appointed
thereto by the Board of Directors. While the By-Laws of respondent corporation
provides that the Board may from time to time appoint such officers as it may
deem necessary or proper, he avers that respondents failed to present any board
resolution that he was appointed pursuant to said By-Laws. He instead alleges that he was hired as
Manager of respondent corporation solely by respondent Abe. For these reasons, petitioner claims to be a
mere employee of respondent corporation rather than as a corporate officer.
We find merit in petitioner’s
contention.
“‘Corporate
officers’ in the context of Presidential Decree No. 902-A are those officers of
the corporation who are given that character by the Corporation Code or by the
corporation’s by-laws. 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 corporation’s by-laws.”[22]
Respondents claim that petitioner
was appointed Manager by virtue of Section 1, Article IV of respondent
corporation’s By-Laws which provides:
ARTICLE IV
OFFICER
Section
1. Election/Appointment
– Immediately after their election, the Board of Directors shall formally
organize by electing the President, Vice-President, the Secretary at said
meeting.
The
Board, may from time to time, appoint such other officers as it may determine
to be necessary or proper. Any
two (2) or more positions may be held concurrently by the same person, except
that no one shall act as President and Treasurer or Secretary at the same time.
x x x x[23]
(Emphasis ours)
We have however examined the records of
this case and we find nothing to prove that petitioner’s appointment was made
pursuant to the above-quoted provision of respondent corporation’s By-Laws. No copy of board resolution appointing
petitioner as Manager or any other document showing that he was appointed to
said position by action of the board was submitted by respondents. What we
found instead were mere allegations of respondents in their various pleadings[24]
that petitioner was appointed as Manager of respondent corporation and nothing
more. “The Court has stressed time and
again that allegations must be proven by sufficient evidence because mere
allegation is definitely not evidence.”[25]
It also does not escape our attention
that respondents made the following conflicting allegations in their Memorandum
on Appeal[26]
filed before the NLRC which cast doubt on petitioner’s status as a corporate
officer, to wit:
x x x x
24.
Complainant-appellee Renato Real was appointed as the manager of
respondent-appellant Sangu on P25,000.00. As such, he was tasked to oversee the
operations of the company. x x x (Emphasis
ours)
x x x
x
As earlier stated,
complainant-appellee Renato Real was hired as the manager of
respondent-appellant Sangu. As such, his
position was reposed with full trust and confidence. x x x
While
respondents repeatedly claim that petitioner was appointed as Manager pursuant
to the corporation’s By-Laws, the above-quoted inconsistencies in their
allegations as to how petitioner was placed in said position, coupled by the
fact that they failed to produce any documentary evidence to prove that petitioner
was appointed thereto by action or with approval of the board, only leads this
Court to believe otherwise. It has been
consistently held that “[a]n ‘office’ is created by the charter of the
corporation and the officer is elected (or appointed) by the directors or
stockholders.”[27] Clearly here, respondents failed to prove
that petitioner was appointed by the board of directors. Thus, we cannot subscribe to their claim that
petitioner is a corporate officer.
Having said this, we find that there is no intra-corporate relationship
between the parties insofar as petitioner’s complaint for illegal dismissal is
concerned and that same does not satisfy the relationship test.
Present controversy does not
relate to intra-corporate dispute
We
now go to the nature of controversy test. As earlier stated, respondents
terminated the services of petitioner for the following reasons: (1) his
continuous absences at his post at Ogino Philippines, Inc; (2) respondents’
loss of trust and confidence on petitioner; and, (3) to cut down operational
expenses to reduce further losses being experienced by the corporation. Hence, petitioner filed a complaint for
illegal dismissal and sought reinstatement, backwages, moral damages and
attorney’s fees. From these, it is not
difficult to see that the reasons given by respondents for dismissing
petitioner have something to do with his being a Manager of respondent
corporation and nothing with his being a director or stockholder. For one,
petitioner’s continuous absences in his post in Ogino relates to his
performance as Manager. Second,
respondents’ loss of trust and confidence in petitioner stemmed from his
alleged acts of establishing a company
engaged in the same line of business as respondent corporation’s and submitting
proposals to the latter’s clients while he was still serving as its
Manager. While we note that respondents
also claim these acts as constituting acts of disloyalty of petitioner as
director and stockholder, we, however, think that same is a mere afterthought
on their part to make it appear that the present case involves an element of
intra-corporate controversy. This is
because before the Labor Arbiter, respondents did not see such acts to be
disloyal acts of a director and stockholder but rather, as constituting willful
breach of the trust reposed upon petitioner as Manager.[28] It was only after respondents invoked the
Labor Arbiter’s lack of jurisdiction over petitioner’s complaint in the
Supplemental Memorandum of Appeal[29]
filed before the NLRC that respondents started considering said acts as such. Third,
in saying that they were dismissing petitioner to cut operational expenses,
respondents actually want to save on the salaries and other remunerations being
given to petitioner as its Manager. Thus,
when petitioner sought for reinstatement, he wanted to recover his position as
Manager, a position which we have, however, earlier declared to be not a
corporate position. He is not trying to
recover a seat in the board of directors or to any appointive or elective corporate
position which has been declared vacant by the board. Certainly, what we have here is a case of
termination of employment which is a labor controversy and not an intra-corporate
dispute. In sum, we hold that petitioner’s
complaint likewise does not satisfy the nature of controversy test.
With
the elements of intra-corporate controversy being absent in this case, we thus
hold that petitioner’s complaint for illegal dismissal against respondents is
not intra-corporate. Rather, it is a termination dispute and, consequently,
falls under the jurisdiction of the Labor Arbiter pursuant to Section 217[30]
of the Labor Code.
We
take note of the cases cited by respondents and find them inapplicable to the
case at bar. Fortune Cement
Corporation v. National Labor Relations Commission[31] involves a member
of the board of directors and at the same time a corporate officer who claims
he was illegally dismissed after he was stripped of his corporate position of
Executive Vice-President because of loss of trust and confidence. On the other hand, Philippine School of
Business Administration v. Leano[32]
and Pearson & George v. National Labor Relations Commission[33] both concern a
complaint for illegal dismissal by corporate officers who were not re-elected
to their respective corporate positions.
The Court declared all these cases as involving intra-corporate
controversies and thus affirmed the jurisdiction of the SEC (now the RTC)[34]
over them precisely because they all relate to corporate officers and their
removal or non-reelection to their respective corporate positions. Said cases are by no means similar to the
present case because as discussed earlier, petitioner here is not a corporate
officer.
With the foregoing, it is clear that
the CA erred in affirming the decision of the NLRC which dismissed petitioner’s
complaint for lack of jurisdiction. In
cases such as this, the Court normally remands the case to the NLRC and directs
it to properly dispose of the case on the merits. “However, when there is enough basis on which
a proper evaluation of the merits of petitioner’s case may be had, the Court
may dispense with the time-consuming procedure of remand in order to prevent
further delays in the disposition of the case.”[35]
“It is already an accepted rule of procedure
for us to strive to settle the entire controversy in a single proceeding,
leaving no root or branch to bear the seeds of litigation. If, based on the records, the pleadings, and
other evidence, the dispute can be resolved by us, we will do so to serve the
ends of justice instead of remanding the case to the lower court for further
proceedings.”[36] We have gone over the records before us and
we are convinced that we can now altogether resolve the issue of the validity
of petitioner’s dismissal and hence, we shall proceed to do so.
Petitioner’s dismissal not in accordance with law
“In an illegal dismissal case, the onus
probandi rests on the employer to prove that [the] dismissal of an employee
is for a valid cause.”[37]
Here, as correctly observed by the Labor
Arbiter, respondents failed to produce any convincing proof to support the
grounds for which they terminated petitioner.
Respondents contend that petitioner has been absent for several months,
yet they failed to present any proof that petitioner was indeed absent for such
a long time. Also, the fact that
petitioner was still able to collect his salaries after his alleged absences
casts doubts on the truthfulness of such charge. Respondents likewise allege that petitioner engaged
in a heated argument with the employees of Epson, one of respondents’ clients. But
just like in the charge of absenteeism, there is no showing that an
investigation on the matter was done and that disciplinary action was imposed
upon petitioner. At any rate, we have
reviewed the records of this case and we agree with the Labor Arbiter that
under the circumstances, said charges are not sufficient bases for petitioner’s
termination. As to the charge of breach of trust allegedly committed by petitioner
when he established a new company engaged in the same line of business as
respondent corporation’s and submitted proposals to two of the latter’s clients
while he was still a Manager, we again observe that these are mere allegations
without sufficient proof. To reiterate, allegations
must be proven by sufficient evidence because mere allegation is definitely not
evidence.[38]
Moreover, petitioner’s dismissal was
effected without due process of law.
“The twin requirements of notice and hearing constitute the essential
elements of due process. The law
requires the employer to furnish the employee sought to be dismissed with two
written notices before termination of employment can be legally effected: (1) a
written notice apprising the employee of the particular acts or omissions for
which his dismissal is sought in order to afford him an opportunity to be heard
and to defend himself with the assistance of counsel, if he desires, and (2) a
subsequent notice informing the employee of the employer’s decision to dismiss
him. This procedure is mandatory and its
absence taints the dismissal with illegality.”[39] Since in this case, petitioner’s dismissal
was effected through a board resolution and all that petitioner received was a
letter informing him of the board’s decision to terminate him, the
abovementioned procedure was clearly not complied with. All told, we agree with the findings of the
Labor Arbiter that petitioner has been illegally dismissed. And, as an illegally dismissed employee is
entitled to the two reliefs of backwages and reinstatement,[40]
we affirm the Labor Arbiter’s judgment ordering petitioner’s reinstatement to
his former position without loss of seniority rights and other privileges and
awarding backwages from the time of his dismissal until actually reinstated. Considering that petitioner has to secure the
services of counsel to protect his interest and necessarily has to incur
expenses, we likewise affirm the award of attorney’s fees which is equivalent
to 10% of the total backwages that respondents must pay petitioner in
accordance with this Decision.
WHEREFORE, the petition is
hereby GRANTED. The assailed
SO
ORDERED.
MARIANO C.
Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson
PRESBITERO J. VELASCO, JR. Associate
Justice |
TERESITA J. LEONARDO-DE CASTRO Associate
Justice |
JOSE
Associate Justice
C E R T I F I C A T I O N
Pursuant
to Section 13, Article VIII of the Constitution, it is hereby certified 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.
RENATO C. CORONA
Chief Justice
[1] CA rollo, pp. 370-394; penned by Associate Justice Perlita J. Tria Tirona and concurred in by Associate Justices Delilah Vidallon-Magtolis and Jose C. Reyes, Jr.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9] 334 Phil.424, 430 (1997).
[10] CA rollo, pp. 370-394.
[11] 323 Phil. 166 (1996).
[12] 212 Phil. 716 (1984).
[13] G.R. No. 79762, January 24, 1991, 193 SCRA 258.
[14] Supra note 9.
[15] Respondent’s Comment/Opposition (To the Petition for Review), rollo, pp. 89-100.
[16] Supra note 9 at 430.
[17] 320 Phil. 353, 359-360 (1995).
[18] See C.A. Azucena Jr.’s The Labor Code With Comments and Cases, Volume II, 6th Edition (2007) pp. 46-49.
[19] Pursuant to Section 5.2 of Republic Act No. 8799 otherwise known as The Securities Regulation Code.
[20]
[21] G.R. No. 165744, August 11, 2008, 561 SCRA 593, 609-612.
[22] Garcia v. Eastern Telecommunications Philippines, Inc., G.R. Nos. 173115 and 173163-164, April 16, 2009, 585 SCRA 450, 468.
[23] CA rollo, pp. 266-273.
[24] Respondents’ Position Paper filed with the Labor Arbiter, id. at 94-113; Memorandum on Appeal and Rejoinder filed with the NLRC, id. at 182-220 and 285-294; Comment filed with the CA, id. at 302-319; Comment/Opposition (To The Petition for Review) and Memorandum filed before this Court, rollo, pp. 89-100 and 169-187.
[25] General
Milling Corporation v. Casio, G.R. No. 149552, March 10, 2010 citing Rimbunan
Hijau Group of Companies v. Oriental Wood Processing Corporation, 507 Phil.
631, 648-649 (2005).
[26] CA rollo, pp. 122-220 at 191 and 212.
[27] Easycall Communications Phils., Inc. v. King, G.R. No. 145901, December 15, 2005, 478 SCRA 102, 110.
[28] Respondents’ Position Paper, CA rollo, pp. 94-113 at 109-110.
[29]
[30] ART. 217. Jurisdiction of the Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lock-outs; and
6.
Except claims for Employees Compensation, Social
Security, Medicare and Maternity benefits, all other claims arising from
employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for reinstatement
x x x x
[31] Supra note 13.
[32] Supra note 12.
[33] Supra note 11 at 173-174.
[34] Pursuant to Section 5.2 of Republic Act No. 8799 otherwise known as The Securities Regulation Code.
[35] Leandro M. Alcantara v. The Philippine Commercial and International Bank, G.R. No. 151349, October 20, 2010 citing Somoso v. Court of Appeals, G.R. No. 78050, October 23, 1989, 178 SCRA 654, 663; Bach v. Ongkiko Kalaw Manhit & Acorda Law Offices, G.R. No. 160334, September 11, 2006, 501 SCRA 419, 426.
[36] Id. citing Apo Fruits Corporation v. Court of Appeals, G.R. No. 164195, February 6, 2007, 514 SCRA 537, 555.
[37] Pepsi Cola Products Philippines, Inc. v.
[38] Supra note 25.
[39] Supra note 27 at 113-114.
[40] Golden Ace Builders v. Jose Talde, G.R. No. 187200, May 5, 2010.