MATLING INDUSTRIAL 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.

Where the complaint for illegal dismissal concerns a corporate officer, however, the controversy
falls under the jurisdiction of the 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.

Thus, pursuant to the provision 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 By-laws. 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 and are not empowered to
exercise the functions of the corporate Officers, except those functions lawfully delegated to
them.

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.