De Rossi v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Armando T. de Rossi, an Italian citizen, was the Executive Vice-President and General Manager of Matling Industrial and Commercial Corporation (MICC) from July 1, 1985. On August 10, 1988, MICC terminated his employment, citing his failure to secure an employment permit, gross mismanagement, and misuse of corporate funds. De Rossi contended that it was MICC's duty to secure his work permit and that his termination lacked just cause. Procedural History: De Rossi filed a complaint for illegal dismissal with damages before the National Labor Relations Commission (NLRC). Labor Arbiter Asuncion ruled in favor of de Rossi, ordering reinstatement with backwages and damages. MICC appealed to the NLRC, arguing that the Labor Arbiter committed grave abuse of discretion and that the position of Executive Vice-President is an elective post, making the dismissal an intra-corporate matter within the SEC's jurisdiction. Despite issuing a writ of execution for backwages, the NLRC, on appeal, ultimately dismissed the case for want of jurisdiction, yielding to Supreme Court jurisprudence that vests jurisdiction over such matters with the SEC, even though it believed it had jurisdiction under amended Article 217 of the Labor Code. The Petition: De Rossi filed a petition for certiorari with the Supreme Court, assailing the NLRC's decision to dismiss the case for lack of jurisdiction, arguing that the NLRC committed grave abuse of discretion and that his case was not similar to cited precedents as he was neither elected nor a stockholder, and the issue of jurisdiction was not raised until appeal.
Issue(s)
Whether the National Labor Relations Commission (NLRC) committed grave abuse of discretion amounting to lack of jurisdiction in holding that the Securities and Exchange Commission (SEC) has jurisdiction over the complaint for illegal dismissal filed by a corporate executive. Whether the issues raised in the complaint for illegal dismissal are ripe for adjudication by the Supreme Court.
Ruling
The petition is denied, and the NLRC's dismissal of the complaint for lack of jurisdiction is affirmed. The Supreme Court held that the SEC has original and exclusive jurisdiction over cases involving the removal of corporate officers.
Ratio Decidendi
On the issue of jurisdiction over the removal of a corporate officer: The Supreme Court affirmed the NLRC's decision to dismiss the case for want of jurisdiction, reiterating its consistent holding that the Securities and Exchange Commission (SEC), not the National Labor Relations Commission (NLRC), possesses original and exclusive jurisdiction over cases involving the removal of corporate officers. This jurisdiction is derived from Section 5(c) of Presidential Decree No. 902-A, which explicitly grants the SEC authority over controversies concerning the election or appointment of officers or managers of corporations. The Court emphasized that a corporate officer's removal is a corporate act, and any controversy arising therefrom is an intra-corporate dispute, regardless of the reasons for the removal. The nature of the dispute remains intra-corporate, even if the grounds for removal involve allegations of fraud or mismanagement, as these matters fall within the purview of corporate affairs and management, requiring the adjudicative expertise of the SEC. The Court cited numerous precedents establishing this principle, underscoring the stability of jurisprudence in this regard. The Court also clarified that the position of Executive Vice-President, as defined by the corporation's by-laws, clearly falls within the definition of a corporate officer whose removal is subject to SEC jurisdiction. The Court further noted that the argument that the issue of jurisdiction was raised late was unavailing, as lack of jurisdiction may be questioned at any time, even on appeal, because jurisdiction is conferred by law and cannot be waived by the parties or determined by the court itself. Therefore, the lack of jurisdiction on the part of the Labor Arbiter and the NLRC was fatal to the petitioner's cause. There was no discussion of ripeness in the provided text.
Main Doctrine
The Securities and Exchange Commission (SEC), not the National Labor Relations Commission (NLRC), has original and exclusive jurisdiction over cases involving the removal of corporate officers, as such controversies fall under intra-corporate affairs governed by P.D. No. 902-A.