G.R. No. 171993, 12 December 2011


Respondent Alfredo Joson was the General Manager, incorporator, director and stockholder of Marc II Marketing (Petitioner Corporation). Before Petitioner Corporation was officially incorporated, respondent has already been engaged by petitioner Lucila Joson, in her capacity as President of Marc Marketing Inc., to work as the General Manager of Petitioner Corporation through a management contract.

However, Petitioner Corporation decided to stop and cease its operation wherein respondent’s services were then terminated. Feeling aggrieved, respondent filed a Complaint for Reinstatement and Money Claim against petitioners before the Labor Arbiter which ruled in favor of respondent. The National Labor and Relations Commission (NLRC) reversed said decision. The Court of Appeals (CA) however, upheld the ruling of the Labor Arbiter. Hence, this petition.


Whether or not the Labor Arbiter has jurisdiction over the controversy at bar.


Yes. While Article 217(a) 229 of the Labor Code, as amended, provides that it is the Labor Arbiter who has the original and exclusive jurisdiction over cases involving termination or dismissal of workers when the person dismissed or terminated is a corporate officer, the case automatically falls within the province of the Regional Trial Court (RTC). The dismissal of a corporate officer is always regarded as a corporate act and/or an intra-corporate controversy.

In conformity with Section 25 of the Corporation Code, whoever are the corporate officers enumerated in the by-laws are the exclusive officers of the corporation and the Board has no power to create other officers without amending first the corporate by-laws. However, the Board may create appointive positions other than the positions of the corporate officers, but the persons occupying such positions are not considered as corporate officers within the meaning of Section 25 of the Corporation Code and are not empowered to exercise the functions of the corporate officers, except those functions lawfully delegated to them. Their functioning and duties are to be determined by the Board of Directors/Trustees.

In the case at bar, the respondent was not a corporate officer of Petitioner Corporation because his position as General Manager was not specifically mentioned in the roster of corporate officers in its corporate by-laws. Thus respondent, can only be regarded as its employee or subordinate official. Accordingly, respondent’s dismissal as Petitioner Corporation’s General Manager did not amount to an intra-corporate controversy. Jurisdiction therefore properly belongs with the Labor Arbiter and not with the RTC.

*Case Digest by April Rose B. Tuanda, JD-IV, Andres Bonifacio Law School, S.Y 2019-2020