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FRANCISCO vs. NLRC
Facts: Petitoner was hired by Kasei Corporation during the incorporation stage. She was designated as accountant and corporate
secretary and was assigned to handle all the accounting needs of the company. She was also designated as Liason Officer to the City of
Manila to secure permits for the operation of the company. In 1996, Petitioner was designated as Acting Manager. She was assigned to
handle recruitment of all employees and perform management administration functions. In 2001, she was replaced by Liza Fuentes as
Manager. Kasei Corporation reduced her salary to P2,500 per month which was until September. She asked for her salary but was
informed that she was no longer connected to the company. She did not anymore report to work since she was not paid for her salary.
She filed an action for constructive dismissal with the Labor Arbiter. The Labor Arbiter found that the petitioner was illegally dismissed.
NLRC affirmed the decision while CA reversed it.
Issue: Whether or not there was an employer-employee relationship.
Ruling: The court held that in this jurisdiction, there has been no uniform test to determine the existence of an employer-employee
relation. Generally, courts have relied on the so-called right of control test where the person for whom the services are performed
reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to the
standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the
payrolls, can help in determining the existence of an employer-employee relationship.
The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employer’s power to control the
employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic realities of
the activity or relationship.
In Sevilla v. Court of Appeals, the court observed the need to consider the existing economic conditions prevailing between the parties,
in addition to the standard of right-of-control like the inclusion of the employee in the payrolls, to give a clearer picture in determining
the existence of an employer-employee relationship based on an analysis of the totality of economic circumstances of the worker.

2. Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic
activity, such as: (1) the extent to which the services performed are an integral part of the employer’s business; (2) the extent of the
worker’s investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the worker’s
opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the degree
of dependency of the worker upon the employer for his continued employment in that line of business. The proper standard of
economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of
business.
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct
control and supervision of Seiji Kamura, the corporation’s Technical Consultant. It is therefore apparent that petitioner is economically
dependent on respondent corporation for her continued employment in the latter’s line of business.
There can be no other conclusion that petitioner is an employee of respondent Kasei Corporation. She was selected and engaged by the
company for compensation, and is economically dependent upon respondent for her continued employment in that line of business.
Her main job function involved accounting and tax services rendered to Respondent Corporation on a regular basis over an indefinite
period of engagement. Respondent Corporation hired and engaged petitioner for compensation, with the power to dismiss her for
cause. More importantly, Respondent Corporation had the power to control petitioner with the means and methods by which the work
is to be accomplished.
JOSE SONZA vs. ABS-CBN BROADCASTING CORPORATIONG.R. No. 138051 June 10, 2004
FACTS: In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development Corporation (MJMDC). ABS-
CBN was represented by its corporate officers while MJMDC was represented by Sonza, as President and general manager, and Tiangco
as its EVP and treasurer. Referred to in the agreement as agent, MJMDC agreed to provide Sonza’s services exclusively to ABS-CBN as
talent for radio and television. ABS-CBN agreed to pay Sonza a monthly talent fee of P310, 000 for the first year andP317, 000 for the
second and third year. On April 1996, Sonza wrote a letter to ABS-CBN's President, Eugenio Lopez III, where he irrevocably resigned in
view of the recent events concerning his program and career. The acts of the station are violative of the Agreement and said letter will
serve as notice of rescission of said contract. The letter also contained the waiver and renunciation for recovery of the remaining
amount stipulated but reserves the right to seek recovery of the other benefits under said Agreement. After the said letter, Sonza filed
with the Department of Labor and Employment a complaint alleging that ABS-CBN did not pay his salaries, separation pay, service
incentive pay, 13th month pay, signing bonus, travel allowance and amounts under the Employees Stock Option Plan (ESOP). ABS-CBN
contended that no employee-employer relationship existed between the parties. However, ABS-CBN continued to remit Sonza’s
monthly talent fees but opened another account for the same purpose. The Labor Arbiter dismissed the complaint and found that there
is no employee-employer relationship. The LA ruled that he is not an employee by reason of his peculiar skill and talent as a TV host and
a radio broadcaster. Unlike an ordinary employee, he was free to perform his services in accordance with his own style. NLRC and CA
affirmed the LA. Should there be any complaint, it does not arise from an employer-employee relationship but from a breach of
contract.
ISSUE: Whether or not there was employer-employee relationship between the parties.
HELD: There is no employer-employee relationship between Sonza and ABS-CBN. Petition denied. Judgment decision affirmed. Case law
has consistently held that the elements of an employee-employer relationship are selection and engagement of the employee, the
payment of wages, the power of dismissal and the employer’s power to control the employee on the means and methods by which the
work is accomplished. The last element, the so-called "control test", is the most important element.
JAVIER v FLY ACE CORPORATION
FACTS: On May 23, 2008, Javier filed a complaint before the NLRC for underpayment of salaries and other labor standard benefits. He
alleged that he was an employee of Fly Ace since September 2007, performing various tasks at the respondent’s warehouse such as
cleaning and arranging the canned items before their delivery to certain locations, except in instances when he would be ordered to
accompany the company’s delivery vehicles, as pahinante; that he reported for work from Monday to Saturday from 7:00 o’clock in the
morning to 5:00 o’clock in the afternoon; that during his employment, he was not issued an identification card and pay slips by the
company; that on May 6, 2008, he reported for work but he was no longer allowed to enter the company premises by the security
guard upon the instruction of Ruben Ong, his superior; that after several minutes of begging to the guard to allow him to enter, he saw
Ong whom he approached and asked why he was being barred from entering the premises; that Ong replied by saying, "Tanungin mo
anak mo;" that he then went home and discussed the matter with his family; that he discovered that Ong had been courting his
daughter Annalyn after the two met at a fiesta celebration in Malabon City; that Annalyn tried to talk to Ong and convince him to spare
her father from trouble but he refused to accede; that thereafter, Javier was terminated from his employment without notice; and that
he was neither given the opportunity to refute the cause/s of his dismissal from work. Fly Ace averred that it was engaged in the

3. business of importation and sales of groceries. Sometime in December 2007, Javier was contracted by its employee, Mr. Ong, as extra
helper on a pakyaw basis at an agreed rate of P 300.00 per trip, which was later increased to P 325.00 in January 2008. Mr. Ong
contracted Javier roughly 5 to 6 times only in a month whenever the vehicle of its contracted hauler, Milmar Hauling Services, was not
available. On April 30, 2008, Fly Ace no longer needed the services of Javier. Denying that he was their employee, Fly Ace insisted that
there was no illegal dismissal. Fly Ace submitted a copy of its agreement with Milmar Hauling Services and copies of acknowledgment
receipts evidencing payment to Javier for his contracted services bearing the words, "daily manpower (pakyaw/piece rate pay)" and the
latter’s signatures/initials. LA dismissed the complaint. Javier failed to present proof that he was a regular employee of Fly Ace. [no
ID,documents, payslips. Fly Ace is not engaged in trucking business but in the importation and sales of groceries. Since there is a regular
hauler to deliver its products, we give credence to Respondents’ claim that complainant was contracted on "pakiao"basis. NLRC It was
of the view that a pakyaw -basis arrangement did not preclude the existence of employer-employee relationship." Payment by result x x
x is a method of compensation and does not define the essence of the relation. It is a mere method of computing compensation, not a
basis for determining the existence or absence of an employer-employee relationship." The NLRC further averred that it did not follow
that a worker was a job contractor and not an employee, just because the work he was doing was not directly related to the employer’s
trade or business or the work may be considered as "extra" helper as in this case; and that the relationship of an employer and an
employee was determined by law and the same would prevail whatever the parties may call it. Finding Javier to be a regular employee,
the NLRC ruled that he was entitled to a security of tenure. For failing to present proof of a valid cause for his termination, Fly Ace was
found to be liable for illegal dismissal of Javier who was likewise entitled to backwages and separation pay in lieu of reinstatement. CA
reinstated dismissal of complaint. Javier failed to prove by substantial evidence er-ee relationship. Did notpass the control test.
ISSUE: WON Javier was regular employee of Fly Ace. NO, onus probandi was on Javier and he failed to provide substantial evidence.
RULING: In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an employee was for a valid
cause. However, before a case for illegal dismissal can prosper, an employer-employee relationship must first be established. Existence
of an employer-employee relationship between him and Fly Ace is essentially a question of fact. In dealing with factual issues in labor
cases, " substantial evidence–that amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion –is sufficient."
Ymbong vs. ABS-CBN G.R. No. 184885
Facts: Petitioner Ernesto G. Ymbong started working for ABS-CBN Broadcasting Corporation (ABS-CBN) in 1993 at its regional station in
Cebu as a television talent, co-anchoring Hoy Gising and TV Patrol Cebu. His stint in ABS-CBN later extended to radio when ABS-CBN
Cebu launched its AM station DYAB in 1995 where he worked as drama and voice talent, spinner, scriptwriter and public affairs program
anchor. Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu. Starting 1995, he worked as talent, director and scriptwriter
for various radio programs aired over DYAB. On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No. HR-ER-016 or the
“Policy on Employees Seeking Public Office.” The pertinent portions read:
1. Any employee who intends to run for any public office position, must file his/her letter of resignation, at least thirty (30) days
prior to the official filing of the certificate of candidacy either for national or local election. x x x x
3. Further, any employee who intends to join a political group/party or even with no political affiliation but who intends to openly
and aggressively campaign for a candidate or group of candidates (e.g. publicly speaking/endorsing candidate, recruiting campaign
workers, etc.) must file a request for leave of absence subject to management’s approval. For this particular reason, the employee
should file the leave request at least thirty (30) days prior to the start of the planned leave period.
Because of the impending May 1998 elections and based on his immediate recollection of the policy at that time, Dante Luzon, Assistant
Station Manager of DYAB issued the following memorandum:
TO : ALL CONCERNED
FROM : DANTE LUZON
DATE : MARCH 25, 1998
SUBJECT : AS STATED
Please be informed that per company policy, any employee/talent who wants to run for any position in the coming election will have to
file a leave of absence the moment he/she files his/her certificate of candidacy.
The services rendered by the concerned employee/talent to this company will then be temporarily suspended for the entire
campaign/election period.

4. For strict compliance.
After the issuance of the March 25, 1998 Memorandum, Ymbong got in touch with Luzon. Luzon claims that Ymbong approached him
and told him that he would leave radio for a couple of months because he will campaign for the administration ticket. It was only after
the elections that they found out that Ymbong actually ran for public office himself at the eleventh hour. Ymbong, on the other hand,
claims that in accordance with the March 25, 1998 Memorandum, he informed Luzon through a letter that he would take a few months
leave of absence from March 8, 1998 to May 18, 1998 since he was running for councilor of Lapu-Lapu City. As regards Patalinghug,
Patalinghug approached Luzon and advised him that he will run as councilor for Naga, Cebu. According to Luzon, he clarified to
Patalinghug that he will be considered resigned and not just on leave once he files a certificate of candidacy. Later, Ymbong and
Patalinghug both tried to come back to ABS-CBN Cebu. According to Luzon, he informed them that they cannot work there anymore
because of company policy. This was stressed even in subsequent meetings and they were told that the company was not allowing any
exceptions. ABS-CBN, however, agreed out of pure liberality to give them a chance to wind up their participation in the radio drama,
Nagbabagang Langit, since it was rating well and to avoid an abrupt ending. The agreed winding-up, however, dragged on for so long
prompting Luzon to issue to Ymbong the memorandum dated September 14, 1998 automatically terminating them.
Issue: 1. whether Policy No. HR-ER-016 is valid
2. whether the March 25, 1998 Memorandum issued by Luzonsuperseded Policy No. HR-ER-016
3. whether Ymbong, by seeking an elective post, is deemed to have resigned and not dismissed by ABS-CBN.
Held: 1. ABS-CBN had a valid justification for Policy No. HR-ER-016. Its rationale is embodied in the policy itself, to wit: Rationale:
ABS-CBN BROADCASTING CORPORATION strongly believes that it is to the best interest of the company to continuously remain
apolitical. While it encourages and supports its employees to have greater political awareness and for them to exercise their right to
suffrage, the company, however, prefers to remain politically independent and unattached to any political individual or entity.
Therefore, employees who [intend] to run for public office or accept political appointment should resign from their positions, in order
to protect the company from any public misconceptions. To preserve its objectivity, neutrality and credibility, the company reiterates
the following policy guidelines for strict implementation. We have consistently held that so long as a company’s management
prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them. In the instant
case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its
objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening
public in it will not be in any way eroded. Even as the law is solicitous of the welfare of the employees, it must also protect the right of
an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to
achieve its purpose cannot be denied.
It is worth noting that such exercise of management prerogative has earned a stamp of approval from no less than our Congress itself
when on February 12, 2001, it enacted Republic Act No. 9006, otherwise known as the “Fair Election Act.” Section 6.6 thereof reads:
6.6. Any mass media columnist, commentator, announcer, reporter, on-air correspondent or personality who is a candidate for
any elective public office or is a campaign volunteer for or employed or retained in any capacity by any candidate or political
party shall be deemed resigned, if so required by their employer, or shall take a leave of absence from his/her work as such
during the campaign period: Provided, That any media practitioner who is an official of a political party or a member of the
campaign staff of a candidate or political party shall not use his/her time or space to favor any candidate or political party.
[Emphasis and underscoring supplied.]
2. The CA correctly ruled that though Luzon, as Assistant Station Manager for Radio of ABS-CBN, has policy-making powers in
relation to his principal task of administering the network’s radio station in the Cebu region, the exercise of such power should be in
accord with the general rules and regulations imposed by the ABS-CBN Head Office to its employees. Clearly, the March 25, 1998
Memorandum issued by Luzon which only requires employees to go on leave if they intend to run for any elective position is in absolute
contradiction with Policy No. HR-ER-016 issued by the ABS-CBN Head Office in Manila which requires the resignation, not only the filing
of a leave of absence, of any employee who intends to run for public office. Having been issued beyond the scope of his authority, the
March 25, 1998 Memorandum is therefore void and did not supersede Policy No. HR-ER-016.
Also worth noting is that Luzon in his Sworn Statement admitted the inaccuracy of his recollection of the company policy when he
issued the March 25, 1998 Memorandum and stated therein that upon double-checking of the exact text of the policy statement and
subsequent confirmation with the ABS-CBN Head Office in Manila, he learned that the policy required resignation for those who will
actually run in elections because the company wanted to maintain its independence. Since the officer who himself issued the subject
memorandum acknowledged that it is not in harmony with the Policy issued by the upper management, there is no reason for it to be a
source of right for Ymbong.

5. 3. As Policy No. HR-ER-016 is the subsisting company policy and not Luzon’s March 25, 1998 Memorandum, Ymbong is deemed
resigned when he ran for councilor.
We find no merit in Ymbong’s argument that “[his] automatic termination x x x was a blatant [disregard] of [his] right to due process” as
he was “never asked to explain why he did not tender his resignation before he ran for public office as mandated by [the subject
company policy].” Ymbong’s overt act of running for councilor of Lapu-Lapu City is tantamount to resignation on his part. He was
separated from ABS-CBN not because he was dismissed but because he resigned. Since there was no termination to speak of, the
requirement of due process in dismissal cases cannot be applied to Ymbong. Thus, ABS-CBN is not duty-bound to ask him to explain
why he did not tender his resignation before he ran for public office as mandated by the subject company policy. Petition denied
Locsin VS Nissan Lease Phils.., October 20,2010
Facts: Locsin was elected Executive Vice President and Treasurer (EVP/Treasurer) of NCLPI. As EVP/Treasurer, his duties and
responsibilities included: (1) the management of the finances of the company; (2) carrying out the directions of the President and/or
the Board of Directors regarding financial management; and (3) the preparation of financial reports to advise the officers and directors
of the financial condition of NCLPI.6 Locsin held this position for 13 years, having been re-elected every year since 1992, until January
21, 2005, when he was nominated and elected Chairman of NCLPI’s Board of Directors.A special meeting was called. One of the items of
the agenda was the election of a new set of officers. Unfortunately, Locsin was neither re-elected Chairman nor reinstated to his
previous position as EVP/Treasurer.8 Aggrieve, Locsin filed a complaint for illegal dismissal with prayer for reinstatement, payment of
backwages, damages and attorney’s fees before the Labor Arbiter against NCLPI and Banson, who was then President of NCLPI. On July
11, 2007, instead of filing their position paper, NCLPI and Banson filed a Motion to Dismiss,10 on the ground that the Labor Arbiter did
not have jurisdiction over the case since the issue of Locsin’s removal as EVP/Treasurer involves an intra-corporate dispute. On August
16, 2007, Locsin submitted his opposition to the motion to dismiss, maintaining his position that he is an employee of NCLPI.
On March 10, 2008, Labor Arbiter Concepcion issued an Order denying the Motion to Dismiss, holding that her office acquired
“jurisdiction to arbitrate and/or decide the instant complaint finding extant in the case an employer-employee relationship.”11NCLPI,
elevated the case to the CA through a Petition for Certiorari under Rule 65 of the Rules of Court.12 The CA Decision – Locsin was a
corporate officer; the issue of his removal as EVP/Treasurer is an intra-corporate dispute under the RTC’s jurisdiction. The CA reversed
and set aside the Labor Arbiter’s Order denying the Motion to Dismiss and ruled that Locsin was a corporate officer. The position of
Executive Vice-President/Treasurer is specifically included in the roster of officers provided for by the (Amended) By-Laws of petitioner
corporation, his duties and responsibilities, as well as compensation as such officer are likewise set forth therein.14 Hence this petition.
Issue: Whether or not the Labor Arbiter has jurisdiction over the alleged illegal dismissal, reinstatement, payment of backwages, and
damages.
Held: The petition lacks merit. Prefatorily, we agree with Locsin’s submission that the NCLPI incorrectly elevated the Labor Arbiter’s
denial of the Motion to Dismiss to the CA. Locsin is correct in positing that the denial of a motion to dismiss is unappealable. As a
general rule, an aggrieved party’s proper recourse to the denial is to file his position paper, interpose the grounds relied upon in the
motion to dismiss before the labor arbiter, and actively participate in the proceedings. Thereafter, the labor arbiter’s decision can be
appealed to the NLRC, not to the CA.
As a rule, we strictly adhere to the rules of procedure and do everything we can, to the point of penalizing violators, to encourage
respect for these rules. We take exception to this general rule, however, when a strict implementation of these rules would cause
substantial injustice to the parties.
We see it appropriate to apply the exception to this case for the reasons discussed below; hence, we are compelled to go beyond
procedure and rule on the merits of the case. In the context of this case, we see sufficient justification to rule on the employer-
employee relationship issue raised by NCLPI, even though the Labor Arbiter’s interlocutory order was incorrectly brought to the CA
under Rule 65.
x x x The NLRC rule proscribing appeal from a denial of a motion to dismiss is similar to the general rule observed in civil procedure that
an order denying a motion to dismiss is interlocutory and, hence, not appealable until final judgment or order is rendered [1 Feria and
Noche, Civil Procedure Annotated 453 (2001 ed.)]. In the labor law setting, a plain, speedy and adequate remedy is still open to the
aggrieved party when a labor arbiter denies a motion to dismiss. This is Article 223 of Presidential Decree No. 442, as amended (Labor
Code), 34 which states:
ART. 223. APPEAL
Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the
following grounds:

6. (a) If there is prima facieevidence of abuse of discretion on the part of the Labor Arbiter; x x x [Emphasis supplied.]
A strict implementation of the NLRC Rules and the Rules of Court would cause injustice to the parties because the Labor Arbiter clearly
has no jurisdiction over the present intra-corporate dispute. The CA correctly ruled that no employer-employee relationship exists
between Locsin and Nissan. Locsin was undeniably Chairman and President, and was elected to these positions by the Nissan board
pursuant to its By-laws.39 As such, he was a corporate officer, not an employee. The CA reached this conclusion by relying on the
submitted facts and on Presidential Decree 902-A, which defines corporate officers as “those officers of a corporation who are given
that character either by the Corporation Code or by the corporation’s by-laws.” Likewise, Section 25 of Batas Pambansa Blg. 69, or the
Corporation Code of the Philippines (Corporation Code) provides that corporate officers are the president, secretary, treasurer and such
other officers as may be provided for in the by-laws. Even as Executive Vice-President/Treasurer, Locsin already acted as a corporate
officer because the position of Executive Vice-President/Treasurer is provided for in Nissan’s By-Laws. Article IV, Section 4 of these By-
Laws specifically provides for this position. Given Locsin’s status as a corporate officer, the RTC, not the Labor Arbiter or the NLRC, has
jurisdiction to hear the legality of the termination of his relationship with Nissan. We have held that a corporate officer’s dismissal is
always a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation. So that the RTC should
exercise jurisdiction based on the following legal reasoning:
Prior to its amendment, Section 5(c) of Presidential Decree No. 902-A (PD 902-A) provided that intra-corporate disputes fall within the
jurisdiction of the Securities and Exchange Commission (SEC):
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations,
partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have
original and exclusive jurisdiction to hear and decide cases involving: x x x x
c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or
associations.
Subsection 5.2, Section 5 of Republic Act No. 8799, which took effect on 8 August 2000, transferred to regional trial courts the SEC’s
jurisdiction over all cases listed in Section 5 of PD 902-A:
5.2. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to
the Courts of general jurisdiction or the appropriate Regional Trial Court.
REYES v. RTC OF MAKATI GR NO.165744
FACTS: Zenith Insurance Corp. and Rodrigo Reyes filed a derivative suit against his brother Oscar to obtain an accounting of the funds
and assets of the corporation that were arbitrarily and fraudulently appropriated by Oscar for himself. Oscar moved to declare the
complaint as a nuisance and harassment suit and should be dismissed according to the Interim Rules of Procedure for Intra-Corporate
Controversies. RTC of Makati, designated as a special commercial court: denied the motion and declared that the complaint is a proper
derivative suit. Oscar went to the CA on a petition for certiorari, prohibition, and mandamus and prayed that the RTC Order be annulled
and set aside and that the trial court be prohibited from continuing with the proceedings. CA: affirmed the RTC Order and denied the
petition. Oscar now comes before the SC on appeal through a petition for review on certiorari under Rule 45 of the Rules of Court.
ISSUES: WON charges of fraud were properly supported by the required factual allegations.
HELD: NO. While the complaint contained allegations of fraud purportedly committed by Oscar, these allegations are not particular
enough to bring the controversy within the special commercial court's jurisdiction; they are not statements of ultimate facts, but are
mere conclusions of law: how and why the alleged appropriation of shares can be characterized as "illegal and fraudulent" were not
explained nor elaborated on. Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely conclusions
of law that, without supporting statements of the facts to which the allegations of fraud refer, do not sufficiently state an effective
cause of action.(2) In ordinary cases, the failure to specifically allege the fraudulent acts does not constitute a ground for dismissal since
such defect can be cured by a bill of particulars. In cases governed by the Interim Rules of Procedure on Intra-Corporate Controversies,
however, a bill of particulars is a prohibited pleading. It is essential, therefore, for the complaint to show on its face what are claimed to
be the fraudulent corporate acts if the complainant wishes to invoke the court's special commercial jurisdiction. Twice in the course of
this case, Rodrigo had been given the opportunity to study the propriety of amending or withdrawing the complaint, but he consistently
refused. The court's function in resolving issues of jurisdiction is limited to the review of the allegations of the complaint and, on the
basis of these allegations, to the determination of whether they are of such nature and subject that they fall within the terms of the law
defining the court's jurisdiction.

7. OKOL vs. SLIMMER’s WORLD, December 11, 2009
Facts: Respondent Slimmers World International operating under the name Behavior Modifications, Inc. (Slimmers World) employed
petitioner Leslie Okol (Okol) as a management trainee on 15 June 1992. She rose up the ranks to become Head Office Manager and then
Director and Vice President from 1996 until her dismissal on 22 September 1999.
On 28 July 1999, prior to Okol’s dismissal, Slimmers World preventively suspended Okol. The suspension arose from the seizure by the
Bureau of Customs of seven Precor elliptical machines and seven Precor treadmills belonging to or consigned to Slimmers World. The
shipment of the equipment was placed under the names of Okol and two customs brokers for a value less than US$500. For being
undervalued, the equipment were seized.
On 2 September 1999, Okol received a memorandum that her suspension had been extended from 2 September until 1 October 1999
pending the outcome of the investigation on the Precor equipment importation. On 17 September 1999, Okol received another
memorandum from Slimmers World requiring her to explain why no disciplinary action should be taken against her in connection with
the equipment seized by the Bureau of Customs. However, Slimmers World found Okol’s explanation to be unsatisfactory. Letter signed
by its president Ronald Joseph Moy (Moy), Slimmers World terminated Okol’s employment.
Okol filed a complaint3 with the Arbitration branch of the NLRC against Slimmers World, for illegal suspension, illegal dismissal, unpaid
commissions, damages and attorney’s fees, with prayer for reinstatement and payment of backwages.
Respondents filed a Motion to Dismiss4 the case with a reservation of their right to file a Position Paper at the proper time. The labor
arbiter granted the motion to dismiss. The labor arbiter ruled that Okol was the vice-president of Slimmers World at the time of her
dismissal. Since it involved a corporate officer, the dispute was an intra-corporate controversy falling outside the jurisdiction of the
Arbitration branch. Okol filed an appeal with the NLRC. 6 The NLRC reversed and set aside the labor arbiter’s order.
Respondents filed a Motion for Reconsideration with the NLRC. However, the NLRC not only decided the case on the merits but did so in
the absence of position papers from both parties. The NLRC denied the motion for lack of merit.
Respondents then filed an appeal with the Court of Appeals, the appellate court set aside the NLRC’s Resolution The Court of Appeals
ruled that the case, being an intra-corporate dispute, falls within the jurisdiction of the regular courts pursuant to Republic Act No.
8799.10 The appellate court added that the NLRC had acted without jurisdiction in giving due course to the complaint and deprived
respondents of their right to due process in deciding the case on the merits. Okol filed a Motion for Reconsideration which was denied.
Hence, the instant petition.
Issue: Whether or not the NLRC has jurisdiction over the illegal dismissal case filed by petitioner.
Held: The petition lacks merit. The issue revolves mainly on whether petitioner was an employee or a corporate officer of Slimmers
World. Section 25 of the Corporation Code enumerates corporate officers as the president, secretary, treasurer and such other officers
as may be provided for in the by-laws. In Tabang v. NLRC,12 we held that 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” usually occupies no office and generally is
employed not by 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.
Clearly, from the documents submitted by respondents, petitioner was a director and officer of Slimmers World. The charges of illegal
suspension, illegal dismissal, unpaid commissions, reinstatement and back wages imputed by petitioner against respondents fall
squarely within the ambit of intra-corporate disputes. In a number of cases,17 we have held that a corporate officer’s dismissal is
always a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation. The question of
remuneration involving a stockholder and officer, not a mere employee, is not a simple labor problem but a matter that comes within
the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code.18
Prior to its amendment, Section 5(c) of Presidential Decree No. 902-A19 (PD 902-A) provided that intra-corporate disputes fall within
the jurisdiction of the Securities and Exchange Commission (SEC):
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations,
partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have
original and exclusive jurisdiction to hear and decide cases involving: x x x
c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or
associations.

8. Subsection 5.2, Section 5 of Republic Act No. 8799, which took effect on 8 August 2000, transferred to regional trial courts the SEC’s
jurisdiction over all cases listed in Section 5 of PD 902-A:
5.2. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to
the Courts of general jurisdiction or the appropriate Regional Trial Court. x x x
It is a settled rule that jurisdiction over the subject matter is conferred by law.20 The determination of the rights of a director and
corporate officer dismissed from his employment as well as the corresponding liability of a corporation, if any, is an intra-corporate
dispute subject to the jurisdiction of the regular courts. Thus, the appellate court correctly ruled that it is not the NLRC but the regular
courts which have jurisdiction over the present case.
SANTIAGO vs. CF SHARP CREW MANAGEMENT, INC
FACTS: Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about five (5) years. He signed a
new contract of employment with the duration of 9 months on Feb 3 1998 and he was to be deployed 10 days after. This contract was
approved by POEA. A week before the date of departure, the respondent received a phone call from petitioner’s wife and some
unknown callers asking not to send the latter off because if allowed, he will jump ship in Canada.
Because of the said information, petitioner was told that he would not be leaving for Canada anymore. This prompted him to file a
complaint for illegal dismissal against the respondent. The LA held the latter responsible. On appeal, the NLRC ruled that there is no
employer-employee relationship between petitioner and respondent, hence, the claims should be dismissed. The CA agreed with the
NLRC’s finding that since petitioner had not departed from the Port of Manila, no employer-employee relationship between the parties
arose and any claim for damages against the so-called employer could have no leg to stand on.
ISSUE: When does the employer-employee relationship involving seafarers commence?
RULING: A distinction must be made between the perfection of the employment contract and the commencement of the employer-
employee relationship. The perfection of the contract, which in this case coincided with the date of execution thereof, occurred when
petitioner and respondent agreed on the object and the cause, as well as the rest of the terms and conditions therein. The
commencement of the employer-employee relationship, as earlier discussed, would have taken place had petitioner been actually
deployed from the point of hire. Thus, even before the start of any employer-employee relationship, contemporaneous with the
perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of
action against the erring party. Thus, if the reverse had happened, that is the seafarer failed or refused to be deployed as agreed upon,
he would be liable for damages.
Respondent’s act of preventing petitioner from departing the port of Manila and boarding "MSV Seaspread" constitutes a breach of
contract, giving rise to petitioner’s cause of action. Respondent unilaterally and unreasonably reneged on its obligation to deploy
petitioner and must therefore answer for the actual damages he suffered.
DFA vs. NLRC
Facts: On 27 January 1993, private respondent Magnayi filed an illegal dismissal case against ADB. Two summonses were served, one
sent directly to the ADB and the other through the Department of Foreign Affairs ("DFA"). ADB and the DFA notified respondent Labor
Arbiter that the ADB, as well as its President and Officers, were covered by an immunity from legal process except for borrowings,
guaranties or the sale of securities pursuant to Article 50(1) and Article 55 of the Agreement Establishing the Asian Development Bank
(the "Charter") in relation to Section 5 and Section 44 of the Agreement Between The Bank And The Government Of The Philippines
Regarding The Bank's Headquarters (the "Headquarters Agreement"). The Labor Arbiter took cognizance of the complaint on the
impression that the ADB had waived its diplomatic immunity from suit and, in time, rendered a decision in favour Magnayi. The ADB
did not appeal the decision. Instead, on 03 November 1993, the DFA referred the matter to the NLRC; in its referral, the DFA sought a
"formal vacation of the void judgment." When DFA failed to obtain a favorable decision from the NLRC, it filed a petition for certiorari.
Issues: 1. Whether or not ADB is immune from suit
2. Whether or not by entering into service contracts with different private companies, ADB has descended to the level of an
ordinary party to a commercial transaction giving rise to a waiver of its immunity from suit
3. Whether or not the DFA has the legal standing to file the present petition
4. Whether or not the extraordinary remedy of certiorari is proper in this case

9. Held:
1. Under the Charter and Headquarters Agreement, the ADB enjoys immunity from legal process of every form, except in the specified
cases of borrowing and guarantee operations, as well as the purchase, sale and underwriting of securities. The Bank’s officers, on their
part, enjoy immunity in respect of all acts performed by them in their official capacity. The Charter and the Headquarters Agreement
granting these immunities and privileges are treaty covenants and commitments voluntarily assumed by the Philippine government
which must be respected. Being an international organization that has been extended a diplomatic status, the ADB is independent of
the municipal law. "One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that it is
immune from the legal writs and processes issued by the tribunals of the country where it is found. The obvious reason for this is that
the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host
government may interfere in their operations or even influence or control its policies and decisions of the organization; besides, such
subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its
member-states."
2. No. The ADB didn't descend to the level of an ordinary party to a commercial transaction, which should have constituted a waiver of
its immunity from suit, by entering into service contracts with different private companies. “There are two conflicting concepts of
sovereign immunity, each widely held and firmly established. According to the classical or absolute theory, a sovereign cannot, without
its consent, be made a respondent in the Courts of another sovereign. According to the newer or restrictive theory, the immunity of the
sovereign is recognized only with regard to public acts or acts jure imperii of a state, but not with regard to private act or acts jure
gestionis. “Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act
can only be the start of the inquiry. The logical question is whether the foreign state is engaged in the activity in the regular course of
business. If the foreign state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by its
nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially when it is not
undertaken for gain or profit.”
The service contracts referred to by private respondent have not been intended by the ADB for profit or gain but are official acts over
which a waiver of immunity would not attach.
3. Yes. The DFA's function includes, among its other mandates, the determination of persons and institutions covered by diplomatic
immunities, a determination which, when challenged, entitles it to seek relief from the court so as not to seriously impair the conduct of
the country's foreign relations. The DFA must be allowed to plead its case whenever necessary or advisable to enable it to help keep
the credibility of the Philippine government before the international community. When international agreements are concluded, the
parties thereto are deemed to have likewise accepted the responsibility of seeing to it that their agreements are duly regarded. In our
country, this task falls principally on the DFA as being the highest executive department with the competence and authority to so act in
this aspect of the international arena. In Holy See vs. Hon. Rosario, Jr., this Court has explained the matter in good detail; viz: "In Public
International Law, when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign court, it requests
the Foreign Office of the state where it is sued to convey to the court that said defendant is entitled to immunity.
"In the United States, the procedure followed is the process of 'suggestion,' where the foreign state or the international organization
sued in an American court requests the Secretary of State to make a determination as to whether it is entitled to immunity. If the
Secretary of State finds that the defendant is immune from suit, he, in turn, asks the Attorney General to submit to the court a
'suggestion' that the defendant is entitled to immunity.
"In the Philippines, the practice is for the foreign government or the international organization to first secure an executive endorsement
of its claim of sovereign or diplomatic immunity. But how the Philippine Foreign Office conveys its endorsement to the courts varies. In
International Catholic Migration Commission vs. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs just sent a letter directly
to the Secretary of Labor and Employment, informing the latter that the respondent-employer could not be sued because it enjoyed
diplomatic immunity. In World Health Organization vs. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court
a telegram to that effect. In Baer vs. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign Affairs to request the
Solicitor General to make, in behalf of the Commander of the United States Naval Base at Olongapo City, Zambales, a 'suggestion' to
respondent Judge. The Solicitor General embodied the 'suggestion' in a manifestation and memorandum as amicus curiae. "In the case
at bench, the Department of Foreign Affairs, through the Office of Legal Affairs moved with this Court to be allowed to intervene on the
side of petitioner. The Court allowed the said Department to file its memorandum in support of petitioner's claim of sovereign
immunity.
"In some cases, the defense of sovereign immunity was submitted directly to the local courts by the respondents through their private
counsels. In cases where the foreign states bypass the Foreign Office, the courts can inquire into the facts and make their own
determination as to the nature of the acts and transactions involved."

10. 4. Yes. Relative to the propriety of the extraordinary remedy of certiorari, the Court has, under special circumstances, so allowed and
entertained such a petition when (a) the questioned order or decision is issued in excess of or without jurisdiction, or (b) where the
order or decision is a patent nullity, which, verily, are the circumstances that can be said to obtain in the present case. When an
adjudicator is devoid of jurisdiction on a matter before him, his action that assumes otherwise would be a clear nullity.
Petition for certiorari is GRANTED, and the decision of the Labor Arbiter, dated 31 August 1993 is VACATED for being NULL AND VOID.
KAWACHI vs. DEL QUERO
FACTS: Private respondent Dominie Del Quero charged A/J Raymundo Pawnshop, Inc.,Virgilio Kawachi and petitioner Julius Kawachi
with illegal dismissal, non-execution of a contract of employment, violation of the minimum wage law, and non-payment of overtime
pay. The complaint was filed before NLRC. The complaint essentially alleged that Virgilio Kawachi hired private respondent as a clerk of
the pawnshop and that on certain occasions, she worked beyondthe regular working hours but was not paid the corresponding
overtime pay. The complaint also narrated an incident on 10 August 2002, wherein petitioner Julius Kawachi scolded private respondent
in front of many people about the way she treated the customers of the pawnshop and afterwards terminated private respondent’s
employment without affording her due process. On 7 November 2002, private respondent Dominie Del Quero filed an action for
damages against petitioners Julius Kawachi and Gayle Kawachi before the MeTC of Quezon City. The complaint for damages specifically
sought the recovery of moral damages, exemplary damages and attorney’s fees. Petitioners moved for the dismissal of the complaint in
the MeTC on the grounds of lack of jurisdiction and forum-shopping. Petitioners argue that the NLRC has jurisdiction over the action for
damages because the alleged injury is work-related. They also contend that private respondent should not be allowed to split her
causes of action by filing the action for damages separately from the labor case. The RTC held that private respondent’s action for
damages was based on the alleged tortious acts committed by her employers and did not seek any relief under the Labor Code.
ISSUE: Whether or not the RTC has jurisdiction in this instant action
HELD: NO, the RTC has no jurisdiction in the instant case. Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor
Arbiter original and exclusive jurisdiction over claims for damages arising from employer-employee relations —in other words, the
Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the Civil Code. Under
the reasonable causal connection rule, if there is a reasonable causal connection between the claim asserted and the employer-
employee relations, then the case is within the jurisdiction of our labor courts. In the absence of such nexus, it is the regular courts that
have jurisdiction.