G.R. No. 157802, 13 October 2010
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. Matling moved to dismiss the complaint on the ground of lack of jurisdiction because the issue was 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.
Coros, in opposing the motion filed by Matling, alleged that his status as a member of the Board was doubtful since he was not formally elected and he did not own a single share of stock. Even assuming that he had been a Director of Matling, he had been removed as the Vice President for Finance and Administration, not as a Director, a fact that the notice of his termination dated April 10, 2000 showed.
Labor Arbiter (LA) ruled in favor of Matling. On appeal, the NLRC reversed the decision of the LA and ruled that the case is cognizable by the LA. Matling appealed to the CA through a petition for certiorari which the CA dismissed as well.
Whether or not Coros was a stockholder/member of the Matling’s Board of Directors .
No. Conformably with Section 25, 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.
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 occupies no office and generally is employed not by the 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. In this case, respondent was appointed vice president for nationwide expansion by Malonzo, petitioner’s general manager, not by the board of directors of petitioner. It was also Malonzo who determined the compensation package of respondent. Thus, respondent was an employee, not a “corporate officer.”
Moreover, the Board of Directors of Matling could not validly delegate the power to create a corporate office to the President, in light of Section 25 of the Corporation Code requiring the Board of Directors itself to elect the corporate officers. Verily, the power to elect the corporate officers was a discretionary power that the law exclusively vested in the Board of Directors, and could not be delegated to subordinate officers or agents.22 The office of Vice President for Finance and Administration created by Matling’s President pursuant to By Law No. V was an ordinary, not a corporate, office.
To emphasize, the power to create new offices and the power to appoint the officers to occupy them vested by By-Law No. V merely allowed Matling’s President to create non-corporate offices to be occupied by ordinary employees of Matling. Such powers were incidental to the President’s duties as the executive head of Matling to assist him in the daily operations of the business.
*Case Digest by Stephanie C. Castillo, JD-IV, Andres Bonifacio College, SY: 2019-2020