MATLING INDUSTRIAL AND COMMERCIAL CORPORATION,
RICHARD K. SPENCER, CATHERINE SPENCER, AND ALEX MANCILLA, petitioners, vs.
RICARDO R. COROS, respondent.G.R. No. 157802. October 13, 2010.
FACTS:
After his
dismissal by Matling as its Vice President for Finance and Administration, the
respondent filed a complaint for illegal suspension and illegal dismissal
against Matling and some of its corporate officers (petitioners) in the NLRC,
Sub-Regional Arbitration Branch XII, Iligan City.
The
petitioners moved to dismiss the complaint, raising the ground, among others, 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 Matling’s Board of Directors aside from being its
Vice President for Finance and Administration prior to his termination.
The LA
granted the petitioners’ motion to dismiss, ruling that the respondent was a corporate
officer because he was occupying the position of Vice President for Finance and
Administration and at the same time was a Member of the Board of Directors of
Matling; and that, consequently, his removal was a corporate act of Matling and
the controversy resulting from such removal was under the jurisdiction of the
SEC.
The NLRC
set aside the dismissal, concluding that the respondent’s complaint for illegal
dismissal was properly cognizable by the LA, not by the SEC, because he was not
a corporate officer by virtue of his position in Matling, albeit high ranking
and managerial, not being among the positions listed in Matling’s Constitution
and By-Laws.
The
petitioners elevated the issue to the CA by petition for certiorari. The CA
dismissed the petition for certiorari explaining that “for a position to be
considered as a corporate office, the position must, if not listed in the
by-laws, have been created by the corporation’s board of directors, and the
occupant thereof appointed or elected by the same board of directors or stockholders.”
ISSUE:
Whether or
not respondent was a corporate officer
Whether the
LA or the RTC has jurisdiction over his complaint for illegal dismissal
RULING:
As a rule,
the illegal dismissal of an officer or other employee of a private employer is
properly cognizable by the LA. Where the complaint for illegal dismissal
concerns a corporate officer, however, the controversy falls under the jurisdiction
of the Securities and Exchange Commission (SEC), because the controversy arises
out of intra-corporate or partnership relations between and among stockholders,
members, or associates, or 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 the controversy concerns their individual
franchise or right to exist as such entity; or because the controversy involves
the election or appointment of a director, trustee, officer, or manager of such
corporation, partnership, or association. Such controversy, among others, is
known as an intra-corporate dispute.
Effective
on August 8, 2000, upon the passage of Republic Act No. 8799, otherwise known
as The Securities Regulation Code, the SEC’s jurisdiction over all intra-corporate
disputes was transferred to the RTC.
Under Sec.
25 of the Corporation Code, a position must be expressly mentioned in the
By-Laws in order to be considered as a corporate office. Thus, the creation of
an office pursuant to or under a By-Law enabling provision is not enough to
make a position a corporate office.
Here,
respondent’s position of Vice President for Finance and Administration was not expressly
mentioned in the By-Laws; neither was the position of Vice President for
Finance and Administration created by Matling’s Board of Directors. Lastly, the
President, not the Board of Directors, appointed him.
In order to
determine whether a dispute constitutes an intra-corporate controversy or not, the
Court considers two elements instead, namely: (a) the status or relationship of
the parties; and (b) the nature of the question that is the subject of their
controversy.
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. The circumstances surrounding his appointment to office must be
fully considered to determine whether the dismissal constituted an
intra-corporate controversy or a labor termination dispute.
Obviously
enough, the respondent was not appointed as Vice President for Finance and
Administration because of his being a stockholder or Director of Matling. He
had started working for Matling on September 8, 1966, and had been employed
continuously for 33 years until his termination on April 17, 2000, first as a
bookkeeper, and his climb in 1987 to his last position as Vice President for Finance
and Administration had been gradual but steady.
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.
Comments
Post a Comment