MATLING INDUSTRIAL VS COROS (G.R. NO.

157802 OCTOBER 13, 2010)

Matling Industrial and Commercial Corporation vs Coros
G.R. No. 157802 October 13, 2010
Facts: After his dismissal by Matling as its Vice President for Finance and Administration, the
respondent filed on August 10, 2000 a complaint for illegal suspension and illegal dismissal
against Matling and some of its corporate officers (petitioners) in the NLRC, Sub-Regional
Arbitration Branch XII, Iligan City. The petitioners moved to dismiss the complaint, raising the
ground, among others, that the complaint pertained to the jurisdiction of the Securities and
Exchange Commission (SEC) due to the controversy being intracorporate inasmuch as the
respondent was a member of Matlings Board of Directors aside from being its Vice-President
for Finance and Administration prior to his termination. The respondent opposed the
petitioners motion to dismiss, insisting that his status as a member of Matlings Board of
Directors was doubtful, considering that he had not been formally elected as such; that he
did not own a single share of stock in Matling, considering that he had been made to sign in
blank an undated indorsement of the certificate of stock he had been given in 1992; that
Matling had taken back and retained the certificate of stock in its custody; and that 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. On October 16, 2000, the LA granted the petitioners motion to
dismiss, ruling that the respondent was a corporate officer because he was occupying the
position of Vice President for Finance and Administration and at the same time was a
Member of the Board of Directors of Matling; and that, consequently, his removal was a
corporate act of Matling and the controversy resulting from such removal was under the
jurisdiction of the SEC, pursuant to Section 5, paragraph (c) of Presidential Decree No. 902.
Issue: Whether or not the respondent is a corporate officer within the jurisdiction of the
regular courts.
Held: No. As a rule, the illegal dismissal of an officer or other employee of a private
employer is properly cognizable by the LA. This is pursuant to Article 217 (a) 2 of the Labor
Code, as amended, which provides as follows:
Article 217. Jurisdiction of the Labor Arbiters and the Commission. (a) Except as otherwise
provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to
hear and decide, within thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving
the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand
pesos (P 5,000.00) regardless of whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by
Labor Arbiters. (c) Cases arising from the interpretation or implementation of collective
bargaining agreements and those arising from the interpretation or enforcement of company

personnel policies shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration as may be provided in said agreements.
Where the complaint for illegal dismissal concerns a corporate officer, however, the
controversy falls under the jurisdiction of the Securities and Exchange Commission (SEC),
because the controversy arises out of intra-corporate or partnership relations between and
among stockholders, members, or associates, or between any or all of them and the
corporation, partnership, or association of which they are stockholders, members, or
associates, respectively; and between such corporation, partnership, or association and the
State insofar as the controversy concerns their individual franchise or right to exist as such
entity; or because the controversy involves the election or appointment of a director,
trustee, officer, or manager of such corporation, partnership, or association. Such
controversy, among others, is known as an intra-corporate dispute.
Effective on August 8, 2000, upon the passage of Republic Act No. 8799, otherwise known as
The Securities Regulation Code, the SECs jurisdiction over all intra-corporate disputes was
transferred to the RTC, pursuant to Section 5.2 of RA No. 8799.
Thus, pursuant to the above provision (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 Offices without amending first the corporate Bylaws. However, the Board may create appointive positions other than the positions of
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 functions and duties are to be determined by the Board of Directors/Trustees.
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. The office of Vice
President for Finance and Administration created by Matlings President pursuant to By Law
No. V was an ordinary, not a corporate, office.
The criteria for distinguishing between corporate officers who may be ousted from office at
will, on one hand, and ordinary corporate employees who may only be terminated for just
cause, on the other hand, do not depend on the nature of the services performed, but on the
manner of creation of the office. In the respondents case, he was supposedly at once an
employee, a stockholder, and a Director of Matling. The circumstances surrounding his
appointment to office must be fully considered to determine whether the dismissal
constituted an intra-corporate controversy or a labor termination dispute. We must also
consider whether his status as Director and stockholder had any relation at all to his
appointment and subsequent dismissal as Vice President for Finance and Administration.
GENERAL MILLING CORPORATION vs HON. COURT OF APPEALS, GENERAL MILLING
CORPORATION INDEPENDENT LABOR UNION (GMC-ILU), and RITO MANGUBAT
G.R. No. 146728

February 11, 2004

FACTS: In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling
Corporation (GMC) employed 190 workers. They were all members of private respondent
General Milling Corporation Independent Labor Union. On April 28, 1989, GMC and the union
concluded a collective bargaining agreement (CBA) which included the issue of

representation effective for a term of three years. The day before the expiration of the CBA,
the union sent GMC a proposed CBA, with a request that a counter-proposal be submitted
within ten (10) days. However, GMC had received collective and individual letters from
workers who stated that they had withdrawn from their union membership, on grounds of
religious affiliation and personal differences. Believing that the union no longer had standing
to negotiate a CBA, GMC did not send any counter-proposal.
On December 16, 1991, GMC wrote a letter to the unions officers, Rito Mangubat and Victor
Lastimoso. The letter stated that it felt there was no basis to negotiate with a union which no
longer existed, but that management was nonetheless always willing to dialogue with them
on matters of common concern and was open to suggestions on how the company may
improve its operations. In answer, the union officers wrote a letter dated December 19, 1991
disclaiming any massive disaffiliation or resignation from the union and submitted a
manifesto, signed by its members, stating that they had not withdrawn from the union.
NLRC held that the action of GMC in not negotiating was ULP.
ISSUE: WON the company (GMC) should have entered into collective bargaining with the
union
HELD: The law mandates that the representation provision of a CBA should last for five
years. The relation between labor and management should be undisturbed until the last 60
days of the fifth year. Hence, it is indisputable that when the union requested for a
renegotiation of the economic terms of the CBA on November 29, 1991, it was still the
certified collective bargaining agent of the workers, because it was seeking said
renegotiation within five (5) years from the date of effectivity of the CBA on December 1,
1988. The unions proposal was also submitted within the prescribed 3-year period from the
date of effectivity of the CBA, albeit just before the last day of said period. It was obvious
that GMC had no valid reason to refuse to negotiate in good faith with the union. For refusing
to send a counter-proposal to the union and to bargain anew on the economic terms of the
CBA, the company committed an unfair labor practice under Article 248 of the Labor Code.
ART. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining
Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated
not later than three (3) years after its execution.
ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to
commit any of the following unfair labor practice:
(g) To violate the duty to bargain collectively as prescribed by this Code;
Under Article 252 abovecited, both parties are required to perform their mutual obligation to
meet and convene promptly and expeditiously in good faith for the purpose of negotiating
an agreement. The union lived up to this obligation when it presented proposals for a new
CBA to GMC within three (3) years from the effectivity of the original CBA. But GMC failed in
its duty under Article 252. What it did was to devise a flimsy excuse, by questioning the
existence of the union and the status of its membership to prevent any negotiation.
ART. 250. Procedure in collective bargaining. The following procedures shall be observed in
collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the
other party with a statement of its proposals. The other party shall make a reply thereto not
later than ten (10) calendar days from receipt of such notice.
GMCs failure to make a timely reply to the proposals presented by the union is indicative of
its utter lack of interest in bargaining with the union. Its excuse that it felt the union no
longer represented the workers, was mainly dilatory as it turned out to be utterly baseless.
Failing to comply with the mandatory obligation to submit a reply to the unions proposals,
GMC violated its duty to bargain collectively, making it liable for unfair labor practice.

MERALCO VS QUISUMBING
GRN 127598 JANUARY 27, 1999
YNARES-SANTIAGO, J:.
FACTS:
The court directed the parties to execute a CBA incorporating the terms among which are the following modifications among
others: Wages: PhP 1,900 for 1995-1996; Retroactivity: December 28, 1996-Dec. 1999, etc. Dissatisfied, some members of
the union filed a motion for intervention/reconsideration. Petitioner warns that is the wage increase of Php2,000.00 per
month as ordered is allowed, it would pass the cost covering such increase to the consumers through an increase rate of
electricity. On the retroactivity of the CBA arbitral award, the parties reckon the period as when retroaction shall commence.
ISSUE:
Whether or not retroactivity of arbitral awards shall commence at such time as granted by Secretary.
RULING:
In St. Lukes Medical vs Torres, a deadlock developed during CBA negotiations between management unions. The Secretary

assumed jurisdiction and ordered the retroaction of the CBA to the date of expiration of the previous CBS. The Court
ratiocinated thus: In the absence of a specific provision of law prohibiting retroactive of the effectivity of arbitral awards
issued by the Secretary pursuant to article 263(g) of the Labor Code, public respondent is deemed vested with the plenary
and discretionary powers to determine the effectivity thereof.
In general, a CBA negotiated within six months after the expiration of the existing CBA retroacts to the day immediately
following such date and if agreed thereafter, the effectivity depends on the agreement of the parties. On the other hand, the
law is silent as to the retroactivity of a CBA arbitral award or that granted not by virtue of the mutual agreement of the parties
but by intervention of the government. In the absence of a CBA, the Secretarys determination of the date of retroactivity as
part of his discretionary powers over arbitral awards shall control.
Wherefore, the arbitral award shall retroact from December 1, 1995 to November 30, 1997; and the award of wage is
increased from Php1,900 to Php2,000.

LMG vs.SEC. OF LABOR

OCTOBER 25, 2012 ~ LEAVE A COMMENT

LMG CHEMICALS CORP, LMG CHEMICALS CORP vs.THE

SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, THE HON. LEONARDO A. QUISUMBING, and
CHEMICAL WORKERS UNION
G.R. No. 127422

April 17, 2001

FACTS: LMG Chemicals Corp, (petitioner) is a domestic corp

engaged in the manufacture and sale of various kinds of chemical
substances, including aluminum sulfate which is essential in
purifying water, and technical grade sulfuric acid used in thermal
power plants. Petitioner has three divisions, namely: the Organic
Division, Inorganic Division and the Pinamucan Bulk Carriers. There
are two unions within petitioners Inorganic Division. One union
represents the daily paid employees and the other union represents
the monthly paid employees. Chemical Workers Union, respondent,
is a duly registered labor organization acting as the collective
bargaining agent of all the daily paid employees of petitioners
Inorganic Division.

Sometime in December 1995, the petitioner and the respondent

started negotiation for a new CBA as their old CBA was about to
expire. They were able to agree on the political provisions of the
new CBA, but no agreement was reached on the issue of wage
increase. The economic issues were not also settled.
With the CBA negotiations at a deadlock (StrikeSecretary assumed
jurisdiction)
Secretary of Labor and Employment granted an increase of P140
(higher than the offer of petitioner-company of P135). Also, as to
the effectivity of the new CBASec held:
3. Effectivity of the new CBA
Article 253-A of the Labor Code, as amended, provides that
when no new CBA is signed during a period of six months
from the expiry date of the old CBA, the retroactivity period
shall be according to the parties agreement, Inasmuch as
the parties could not agree on this issue and since this
Office has assumed jurisdiction, then this matter now lies at
the discretion of the Secretary of labor and Employment.
Thus the new Collective Bargaining Agreement which the
parties will sign pursuant to this Order shall retroact to
January 1, 1996.
petitioner contends that public respondent committed grave abuse
of discretion when he ordered that the new CBA which the parties
will sign shall retroact to January 1, 1996
ISSUE: Whether or not the new CBA shall retroact?

HELD:
Petitioner insists that public respondents discretion on the issue of
the date of the effectivity of the new CBA is limited to either: (1)
leaving the matter of the date of effectivity of the new CBA is limited
to either: (1) leaving the matter of the date of effectivity of the new
CBA to the agreement of the parties or (2) ordering that the terms of
the new CBA be prospectively applied.
It must be emphasized that respondent Secretary assumed
jurisdiction over the dispute because it is impressed with national
interest. As noted by the Secretary, the petitioner corp was then
supplying the sulfate requirements of MWSS as well as the sulfuric
acid of NAPOCOR, and consequently, the continuation of the strike
would seriously affect the water supply of Metro Manila and the
power supply of the Luzon Grid. Such authority of the Secretary to
assume jurisdiction carries with it the power to determine the
retroactivity of the parties CBA.
It is well settled in our jurisprudence that the authority of
the Secretary of Labor to assume jurisdiction over a labor
dispute causing or likely to cause a strike or lockout in an
industry indispensable to national interest includes and
extends to all questions and controversies arising
therefrom. The power is plenary and discretionary in nature
to enable him to effectively and efficiently dispose of the
primary dispute.
This Court held in St. Lukes Medical Center, Inc. vs. Torres:
Therefore in the absence of the specific provision of law
prohibiting retroactivity of the effectivity of the arbitral

awards issued by the Secretary of Labor pursuant to Article

263(g) of the Labor Code, such as herein involved, public
respondent is deemed vested with plenary powers to
determine the effectivity thereof.
PETITION DENIED.
From Atty. Bayani