In May 1988, Marcelo Santos was an overseas worker in Oman.

In June 1988, he was

recruited by Palace Hotel in Beijing, China. Due to higher pay and benefits, Santos agreed to
the hotel’s job offer and so he started working there in November 1988. The employment
contract between him and Palace Hotel was however without the intervention of the Philippine
Overseas Employment Administration (POEA). In August 1989, Palace Hotel notified Santos
that he will be laid off due to business reverses. In September 1989, he was officially
terminated.
In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel
Corporation (MHC) and Manila Hotel International, Ltd. (MHIL). The Palace Hotel was
impleaded but no summons were served upon it. MHC is a government owned and controlled
corporation. It owns 50% of MHIL, a foreign corporation (Hong Kong). MHIL manages the
affair of the Palace Hotel. The labor arbiter who handled the case ruled in favor of Santos.
The National Labor Relations Commission (NLRC) affirmed the labor arbiter.
ISSUE: Whether or not the NLRC has jurisdiction over the case.
HELD: No. The NLRC is a very inconvenient forum for the following reasons:
1. The only link that the Philippines has in this case is the fact that Santos is a Filipino;
2. However, the Palace Hotel and MHIL are foreign corporations – MHC cannot be held liable
because it merely owns 50% of MHIL, it has no direct business in the affairs of the Palace
Hotel. The veil of corporate fiction can’t be pierced because it was not shown that MHC is
directly managing the affairs of MHIL. Hence, they are separate entities.
3. Santos’ contract with the Palace Hotel was not entered into in the Philippines;
4. Santos’ contract was entered into without the intervention of the POEA (had POEA
intervened, NLRC still does not have jurisdiction because it will be the POEA which will hear
the case);
5. MHIL and the Palace Hotel are not doing business in the Philippines; their agents/officers are
not residents of the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts pertaining to
the case. It is not competent to determine the facts because the acts complained of happened
outside our jurisdiction. It cannot determine which law is applicable. And in case a judgment
is rendered, it cannot be enforced against the Palace Hotel (in the first place, it was not served
any summons).
The Supreme Court emphasized that under the rule of forum non conveniens, a Philippine
court or agency may assume jurisdiction over the case if it chooses to do so provided:
(1) that the Philippine court is one to which the parties may conveniently resort to;
(2) that the Philippine court is in a position to make an intelligent decision as to the law and
the facts; and
(3) that the Philippine court has or is likely to have power to enforce its decision.
None of the above conditions are apparent in the case at bar.