Marc II Marketing v. Alfredo Joson

TOPICS:

Original and exclusive Jurisdiction of Labor Arbiter - cases involving termination or dismissal of workers;

Jurisdiction of RTC - cases involving termination or dismissal of a corporate officer;

A corporate officers are those officers of a corporation who are given that character either by the Corporation Code or by the corporation's by-laws. Under the Corporation Code, corporate officers are 1) president; (2) secretary; (3) treasurer; and (4) such other officers as may be provided for in the by-laws;

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 by-laws.

FACTS:

Alfredo Joson was the General Manager, incorporator, director and stockholder of Marc II Marketing which took over Marc Marketing. He was employed by Lucila Joson, President of Marc Marketing through a Management Contract. 

Thereafter, Marc II Mktg. decided to stop its operation and apprised Respondent of the termination of his services as GM. Respondent filed a complaint for reinstatement and money claim against Marc II. 

Lucila Joson moved to dismiss the complaint on the ground that the Labor Arbiter lacks jurisdiction as the case involved an intra-corporate controversy, which jurisdiction belongs to the SEC [now with the Regional Trial Court (RTC).

LA’s Decision:

LA favored the respondent. There was an employer-employee relationship between Lucila Joson and Alfredo Joson. Respondent was illegally dismissed.

NLRC’s Decision:

NLRC ruled in favor of petitioner Corp. Respondent was a corporate officer whose dismissal involved a purely intra-corporate controversy.

CA’s Decision:

CA upheld LA’s decision. The respondent was a mere employee of petitioner corporation, who has been illegally dismissed from employment without valid cause and without due process.

ISSUES:

1) WON Alfredo Joson is a corporate officer, which case automatically falls within the jurisdiction of the RTC and not with the Labor Arbiter.

2) WON Lucila Joson can be made joint and severally liable with the petitioner corporation.

RULING:

I.

Alfredo Joson is not a corporate officer.

Under the law, corporate officers are those expressly mentioned by the Corporation Code or by the corporation’s by-laws, while the rest are considered only as employees or subordinate officials. The board of directors has no power to create other corporate offices without first amending the corporate by-laws so as to include therein the newly created corporate office. The dismissal of a corporate officer is always regarded as a corporate act and/or an intra-corporate controversy which falls under the jurisdiction of the RTC. 

In this case, the petitioner Corporation’s by laws did not explicitly reveal the position of a General Manager as one of its corporate officers. Hence, the respondent can only be regarded as an employee or subordinate.

Therefore, being an employee, his case falls within the jurisdiction of the LA and not with the RTC. 

II.

Lucila Joson is jointly and solidariy liable with the petitioner corporation.

Under the law, the corporation has a personality separate and distinct from its officers, stockholders, however its corporate veil can be pierced when the notion of its legal entity is used as a means to perpetrate fraud, illegal act, used as a vehicle for the evasion of an existing obligation, and to confuse legitimate issues.

In this case, Lucila Joson, the President of the corporation acted in bad faith and with malice in effecting the abrupt dismissal of the Respondent without prior notice and without separation pay considering that his termination was not due to business losses or financial reverses. 

Therfore, Lucica Joson can be made personally liable.