Real v. Sangu Philippines
REITERATIONFacts
The Antecedents: Petitioner Renato Real was the Manager of respondent corporation Sangu Philippines, Inc. In 2001, he and 29 other employees filed complaints for illegal dismissal against the corporation and its Vice-President and General Manager, Kiichi Abe. Petitioner was removed from his position as Manager through a Board Resolution, allegedly without prior notice or formal charge. He received a termination letter citing continuous absences, loss of trust and confidence, and the need to cut operational expenses. Respondents refuted the claim, alleging gross misconduct by petitioner since 2000, including frequent absences, neglect of supervision, engaging in a heated argument while drunk at a client's premises, and establishing a competing company. They claimed his dismissal was a valid exercise of management prerogative due to just cause. Procedural History: The Labor Arbiter ruled that petitioner and his co-complainants were illegally dismissed, ordering reinstatement and backwages. The National Labor Relations Commission (NLRC) modified this, dismissing petitioner's complaint for lack of jurisdiction, finding him to be both a stockholder and a corporate officer, thus an intra-corporate controversy. The Court of Appeals (CA) affirmed the NLRC's decision. Petitioner appealed to the Supreme Court. The Petition: Petitioner argued that while he was a stockholder, he was not a corporate officer, and his dismissal case was an employer-employee dispute, not an intra-corporate controversy. Respondents contended that the issue of whether petitioner was a corporate officer was a question of fact beyond the scope of a petition for certiorari, and that his status as a stockholder made the dispute intra-corporate.
Issue(s)
Whether petitioner Renato Real's complaint for illegal dismissal constitutes an intra-corporate controversy beyond the jurisdiction of the Labor Arbiter. Whether petitioner Renato Real is a corporate officer of respondent Sangu Philippines, Inc. Whether petitioner Renato Real was illegally dismissed from his employment.
Ruling
The petition is GRANTED. The assailed Decision of the Court of Appeals is REVERSED and SET ASIDE. The Decision of the Labor Arbiter with respect to petitioner Renato Real is AFFIRMED, and the case is REMANDED to the National Labor Relations Commission for the computation of petitioner's backwages and attorney's fees.
Ratio Decidendi
On the issue of whether petitioner Renato Real's complaint for illegal dismissal constitutes an intra-corporate controversy beyond the jurisdiction of the Labor Arbiter: The Court reiterated the two-tier test for determining intra-corporate controversies: the relationship test and the nature of the controversy test. While petitioner was undisputedly a stockholder and director, the Court found that he was not a corporate officer. The dismissal was based on grounds related to his managerial functions, not his status as a stockholder or director. Therefore, the relationship test was not met, and the nature of the controversy was a termination dispute, not an intra-corporate one. The Labor Arbiter correctly assumed jurisdiction. On the issue of whether petitioner Renato Real is a corporate officer of respondent Sangu Philippines, Inc.: The Court found that petitioner was not a corporate officer. While the by-laws allowed the Board to appoint other officers, respondents failed to present any board resolution or documentary evidence proving petitioner's appointment as Manager by the Board. Petitioner claimed he was hired by respondent Abe. Conflicting allegations from respondents regarding his hiring further weakened their claim. The Court emphasized that an office is created by the charter or by-laws, and the officer is elected or appointed by the directors or stockholders, which was not sufficiently proven in this case. On the issue of whether petitioner Renato Real was illegally dismissed from his employment: The Court found that the employer failed to discharge the onus probandi to prove the validity of the dismissal. Respondents did not present convincing proof of petitioner's alleged prolonged absences or the investigation conducted regarding his conduct at a client's premises. The charge of establishing a competing company was also unsubstantiated. Furthermore, the dismissal was effected without due process, as petitioner was not furnished the required written notices and hearing before termination. Thus, the dismissal was illegal.
Main Doctrine
A complaint for illegal dismissal filed by a managerial employee who is also a stockholder but not a corporate officer is an intra-corporate controversy and thus falls within the jurisdiction of the Labor Arbiter, not the Regional Trial Court.