MAINLAND CONSTRUCTION v. MILA C. MOVILLA, GR No.

118088, 1995-11-23
Facts:
HERMOSISIMA, JR., J.:
Mainland Construction Co., Inc. is a domestic corporation, duly organized and existing under
Philippine laws, having been issued a certificate of registration by the
SEC
Its principal line... of business is the general construction of roads and bridges and the operation
of a service shop for the maintenance of equipment. Respondents on the other hand, are the
surviving heirs of complainant, Ernesto Movilla, who died during the pendency of the action
with the
Labor Arbiter.
Records show that Ernesto Movilla, who was a Certified Public Accountant during his lifetime,
was hired as such by Mainland in 1977. Thereafter, he was promoted to the position of
Administrative Officer with a monthly salary of P4,700.00.
Ernesto Movilla, recorded as receiving a fixed salary of P4,700.00 a month, was registered with
the Social Security System (SSS) as an employee of petitioner corporation. His contributions to
the SSS, Medicare and Employees Compensation Commission (ECC) were deducted from... his
monthly earnings by his said employer.
On April 12, 1987, during petitioner corporation's annual meeting of stockholders, the following
were elected members of the Board of Directors, viz: Robert L. Carabuena, Ellen L. Carabuena,
Lucita Lu Carabuena, Martin G. Lu and Ernesto L. Movilla.
On the same day, an organizational meeting was held and the Board of Directors elected Ernesto
Movilla as Administrative Manager.[3] He occupied the said position up to the time of his death.
On April 2, 1991, the
DOLE... conducted a routine inspection on petitioner corporation and found that it committed
such irregularities in the conduct of its business as:
"1. Underpayment of wages under R.A. 6727 and RTWPB-XI-01;
2. Non-implementation of Wage Order No. RTWPB-XI-02;
3. Unpaid wages for 1989 and 1990;
4. Non-payment of holiday pay and service incentive leave pay; and
5. Unpaid 13th month pay (remaining balance for "1990."[4]
On the basis of this finding, petitioner corporation was ordered by DOLE to pay to its thirteen
employees, which included Movilla, the total amount of P309,435.89, representing their salaries,
holiday pay, service incentive leave pay differentials, unpaid wages and 13th month... pay.
All the employees listed in the DOLE's order were paid by petitioner corporation, except Ernesto
Movilla.
On October 8, 1991, Ernesto Movilla filed a case against petitioner corporation and/or Lucita,
Robert, and Ellen, all surnamed Carabuena, for unpaid wages, separation pay and attorney's fees,
with the Department of Labor and Employment, Regional Arbitration, Branch XI, Davao
City.
On February 29, 1992, Ernesto Movilla died while the case was being tried by the Labor Arbiter
and was promptly substituted by his heirs, private respondents herein, with the consent of the
Labor Arbiter.
The Labor Arbiter rendered judgment on June 26, 1992, dismissing the complaint on the ground
of lack of jurisdiction. Specifically, the Labor Arbiter made the following ratiocination:
"It is clear that in the case at bar, the controversy presented by complainant is intra-corporate in
nature and is within the jurisdiction of the Securities and Exchange Commission, pursuant to
P.D. 902-A (Phil. School of Business Administration, et al. v. Leano,... G.R. No. L-58468,
February 24, 1984; Dy et al. v. NLRC, et al., G.R. No. L-68544, October 27, 1986). What
Movilla is claiming against respondents are his alleged unpaid salaries and separation pay as
Administrative Manager of the corporation for which position he was... appointed by the Board
of Directors. His claims therefore fall under the jurisdiction of the Securities and Exchange
Commission because this is not a simple labor problem; but a matter that comes within the area
of corporate affairs and management, and is in fact a... corporate controversy in contemplation of
the Corporation Code. (Fortune Cement Corporation v. NLRC, et al., G.R No. 79762, January
24, 1991)."[5]
Aggrieved by this decision, respondents appealed to the National Labor Relations Commission
(NLRC). The NLRC ruled that the issue in the case was one which involved a labor dispute
between an employee and petitioner corporation and, thus, the NLRC had jurisdiction to...
resolve the case.
Issues:
the NLRC or the SEC - has jurisdiction over the controversy.
Ruling:
We find for the respondents, it appearing that petitioners' contention is bereft of merit.
In order that the SEC can take cognizance of a case, the controversy must pertain to any of the
following relationships: a) between the corporation, partnership or association and the public; b)
between the corporation, partnership or association and its stockholders, partners,... members or
officers; c) between the corporation, partnership or association and the State as far as its
franchise, permit or license to operate is concerned; and d) among the stockholders, partners or
associates themselves.[7] The fact that the parties... involved in the controversy are all
stockholders or that the parties involved are the stockholders and the corporation does not
necessarily place the dispute within the ambit of the jurisdiction of SEC. The better policy to be
followed in determining jurisdiction over a... case should be to consider concurrent factors such
as the status or relationship of the parties or the nature of the question that is the subject of their
controversy.[8] In the absence of any one of these factors, the SEC will not have jurisdiction.
Furthermore, it does not necessarily follow that every conflict between the corporation and its
stockholders would involve such corporate matters as only the SEC can resolve in the exercise of
its adjudicatory or quasi-judicial powers.[9]
In the case at bench, the claim for unpaid wages and separation pay filed by the complainant
against petitioner corporation involves a labor dispute. It does not involve an intra-corporate
matter, even when it is between a stockholder and a corporation. It relates to... an employer-
employee relationship which is distinct from the corporate relationship of one with the other.
Moreover, there was no showing of any change in the duties being performed by complainant as
an Administrative Officer and as an Administrative Manager after his election... by the Board of
Directors. What comes to the fore is whether there was a change in the nature of his functions
and not merely the nomenclature or title given to his job.
As correctly ruled by the NLRC:
"The claims for unpaid salaries/monetary benefits and separation pay are not a corporate conflict
as respondents presented them to be. If complainant is not an employee, respondent should have
contested the DOLE inspection report. What they did was to... exclude complainant from the
order of payment x x x and worse, he was not both given responsibilities and paid his salaries for
the succeeding months x x x. This is a clear case of constructive dismissal without due process x
x x."[12]
The existence of an employer-employee relationship is a factual question and public respondent's
findings are accorded great weight and respect as the same are supported by substantial
evidence.[13] Hence, we uphold the conclusion of public respondent that
Ernesto Movilla was an employee of petitioner corporation.
It is pertinent to note that petitioner corporation is not prohibited from hiring its corporate
officers to perform services under a circumstance which will make him an employee.[14]
Moreover, although a director of a corporation is not, merely by virtue of... his position, its
employee, said director may act as an employee or accept duties that make him also an
employee.[15]
Since Ernesto Movilla's complaint involves a labor dispute, it is the NLRC, under Article 217 of
the Labor Code of the Philippines, which has jurisdiction over the case at bench.
PIONEER TEXTURIZING CORP. and/or JULIANO LIM,
petitioners
, vs.
NATIONAL LABORRELATIONS COMMISSION, PIONEER TEXTURIZING WORKERS
UNIONand LOURDES A. DE JESUS,
respondents
.
[G.R. No. 118651. October 16, 1997]

FACTS:
De Jesus is petitioners’
reviser/trimmer who based her assigned work on a paper note posted bypetitioners. The posted paper is identified
by its P.O. Number. De Jesus worked on P.O. No. 3853 by
trimming the cloths’ ribs and thereafter submitted tickets corresponding to the work
done to hersupervisor. Three days later, de Jesus received a memorandum requiring her to explain
why nodisciplinary action should be taken against her for dishonesty and tampering of official records
anddocuments with the intention of cheating as P.O. No. 3853 allegedly required no
trimming. Thememorandum also placed her under preventive suspension for thirty days. In her
explanation, de Jesusmaintained that she merely committed a mistake in trimming P.O. No. 3853 and admitted
that she mayhave been negligent, but not for dishonesty or tampering. Nonetheless, she was
terminated fromemployment.De Jesus filed a complaint for illegal dismissal against petitioners. The
Labor Arbiter heldpetitioners guilty of illegal dismissal and were ordered to reinstate de Jesus to her
previous position without loss of seniority rights and with full backwages from the time of her
suspension. On appeal, theNational Labor Relations Commission (NLRC) declared that the status
quo between them should bemaintained an d affirmed the Labor Arbiter’s order of reinstatement,
but without backwages. The NLRCfurther directed petitioner to pay de Jesus her back salaries from the date she
filed her motion forexecution up to the date of the promulgation of the decision. Petitioners filed their partial
motion for reconsideration which the NLRC denied, hence this petition.

ISSUE: Whether or not an order for reinstatement needs a writ of execution?

HELD:No. The provision of Article 223 is clear that an award for reinstatement shall be
immediatelyexecutory even pending appeal and the posting of a bond by the employer shall not
stay the execution forreinstatement. To require the application for and issuance of a writ of execution as
prerequisites for theexecution of a reinstatement award would certainly betray and run counter to the
very object and intent of Article 223, i. e., the immediate execution of a reinstatement order. The
reason is simple. An applicationfor a writ of execution and its issuance could be delayed for
numerous reasons. A mere continuance orpostponement of a scheduled hearing, for instance, or
an inaction on the part of the Labor Arbiter or theNLRC could easily delay the issuance of the writ
thereby setting at naught the strict mandate and noblepurpose envisioned by Article 223. On appeal,
however, the appellate tribunal concerned may enjoin orsuspend the reinstatement order in the
exercise of its sound discretion.Furthermore, the rule is that all doubts in the interpretation and
implementation of labor lawsshould be resolved in favor of labor. In ruling that an order or award for reinstatement
does not require a writ of execution the Court is simply adhering and giving meaning to this rule.
Henceforth, we rule that anaward or order for reinstatement is self-executory. After receipt of the
decision or resolution ordering theemployee's reinstatement, the employer has the right to choose whether to
re-admit the employee to workunder the same terms and conditions prevailing prior to his dismissal
or to reinstate the employee in thepayroll. In either instance, the employer has to inform the
employee of his choice. The notification is based on practical considerations for without
notice, the employee has no way of knowing if he has toreport for work or not.