1.

GRATUITY PAY ISSUE

Sta. Catalina College vs NLRC1

HELD:

This Court is not unmindful of Hilaria's rendition of a total of thirty years of

teaching in petitioner school and should be accorded ample support in her
twilight years. Petitioner school in fact acknowledges her dedicated service to
its students. She can, however, only be awarded with what she is rightfully
entitled to under the law. So Sosito v. Aguinaldo Development Corporation
dictates: [26] chan robles virtual law library
While the Constitution is committed to the policy of social justice and the
protection of the working class, it should not be supposed that every labor
dispute will be automatically decided in favor of labor. Management also has
its own rights which, as such, are entitled to respect and enforcement in the
interest of simple fair play. Out of its concern for those with less privilege in
life, this Court has inclined more often than not toward the worker and upheld
his cause in his conflicts with the employer. Such favoritism, however, has not
blinded us to the rule that justice is in every case for the deserving, to
be dispensed in the light of the established facts and the applicable
law and doctrine. chan robles virtual law library
As for the ruling of the CA affirming that of the NLRC that the P12,000.00
gratuity pay earlier awarded to Hilaria should not be deducted from
the retirement benefits due her, the same is in order. Gratuity pay is
separate and distinct from retirement benefits. It is paid purely out of
generosity. So Republic Planters Bank v. NLRC [27] holds: chan robles
virtual law library
Gratuity pay x x x is paid to the beneficiary for the past services or favor
rendered purely out of the generosity of the giver or grantor. Gratuity,
therefore, is not intended to pay a worker for actual services rendered
or for actual performance. It is a money benefit or bounty given to the
worker, the purpose of which is to reward employees who have
rendered satisfactory service to the company. (Emphasis supplied.)

Retirement benefits, on the other hand, are intended to help the employee
enjoy the remaining years of his life, releasing him from the burden of
worrying for his financial support, and are a form of reward for his loyalty to
the employer. [28] chan robles virtual law library

1 http://www.chanrobles.com/cralawgrno144483november192003.html#.XEfqa2aB1sM
In Hilaria's case, her retirement pay as computed by petitioners amounts to
P59,038.35, P28,853.09 of which had already been given to her under the
PERAA. Since the computed amount of her retirement pay is much lower than
that provided under the law, she is entitled to receive the difference between
the actual amount of her retirement benefits as required by law and that
provided for under the PERAA. Although she did not appeal from the NLRC
decision awarding her P85,287.72, this Court awards the entire amount of the
retirement benefits to which she is rightfully entitled under the law. Technical
rules of procedure are not binding in labor cases. [29] The application of
technical rules of procedure may be relaxed to serve the demands of
substantial justice. [30] chan robles virtual law library

2. PRESIDENT AS CORPORATE OFFICER HENCE, INTRA- CORPORATE

CONTROVERSY AND NOT UNDER LA

Weslayan University vs Maglaya2

Held:

The alleged "appointment" of Maglaya instead of "election" as provided by the by-laws

neither convert the president of university as a mere employee, nor amend its nature as
a corporate officer. With the office specifically mentioned in the by-laws, the NLRC erred
in taking cognizance of the case, and in concluding that Maglaya was a mere employee
and subordinate official because of the manner of his appointment, his duties and
responsibilities, salaries and allowances, and considering the Identification Card, the
Administration and Personnel Policy Manual which specified the retirement of the
university president, and the check disbursement as pieces of evidence supporting such
finding.

A corporate officer's dismissal is always a corporate act, or an intracorporate

controversy which arises between a stockholder and a corporation, and the
nature is not altered by the reason or wisdom with which the Board of Directors
may have in taking such action.59 The issue of the alleged termination involving a
corporate officer, not a mere employee, is not a simple labor problem but a matter

2 https://www.lawphil.net/judjuris/juri2017/jan2017/gr_212774_2017.html
that comes within the area of corporate affairs and management and is a
corporate controversy in contemplation of the Corporation Code.60

The long-established rule is that the jurisdiction over a subject matter is

conferred by law.61 Perforce, Section 5 (c) of PD 902-A, as amended by
Subsection 5.2, Section 5 of Republic Act No. 8799, which provides that the
regional trial courts exercise exclusive jurisdiction over all controversies in the
election or appointment of directors, trustees, officers or managers of
corporations, partnerships or associations, applies in the case at bar.62

To emphasize, the determination of the rights of a corporate officer dismissed

from his employment, as well as the corresponding liability of a corporation, if
any, is an intra-corporate dispute subject to the jurisdiction of the regular
courts.63

As held in Leonor v. Court of Appeals,64 a void judgment for want of jurisdiction is no

judgment at all. It cannot be the source of any right nor the creator of any obligation. All
acts perfonned pursuant to it and all claims emanating from it have no legal effect.
Hence, it can never become final and any writ of execution based on it is void. 65

3. DIRECTORS NOT PERSONALLY LIABLE WITH CORPORATION

Urban Bank vs Pena3

Held:

II
The corporate officers and directors of Urban Bank are not
solidarily or personally liable with their properties for the
corporate liability of Urban Bank to Atty. Peña.

The obligation to pay Peña’s compensation, however, falls solely on Urban Bank.
Absent any proof that individual petitioners as bank officers acted in bad faith or
with gross negligence or assented to a patently unlawful act, they cannot be held
solidarily liable together with the corporation for services performed by the latter’s
agent to secure possession of the Pasay property. Thus, the trial court had indeed

3 http://sc.judiciary.gov.ph/jurisprudence/2011/october2011/145817.htm
committed grave abuse of discretion when it issued a ruling against the eight
individual defendant bank directors and officers and its Decision should be
absolutely reversed and set aside.
A corporation, as a juridical entity, may act only through its directors,
officers and employees.[286] Obligations incurred as a result of the acts of the
directors and officers as corporate agents are not their personal liabilities but
those of the corporation they represent.[287] To hold a director or an officer
personally liable for corporate obligations, two requisites must concur: (1) the
complainant must allege in the complaint that the director or officer assented
to patently unlawful acts of the corporation, or that the officer was guilty of
gross negligence or bad faith; and (2) the complainant must clearly and
convincingly prove such unlawful acts, negligence or bad faith.[288] “To hold a
director, a trustee or an officer personally liable for the debts of the corporation
and, thus, pierce the veil of corporate fiction, bad faith or gross negligence by
the director, trustee or officer in directing the corporate affairs must be
established clearly and convincingly.”[289]

Peña failed to allege and convincingly show that individual defendant bank
directors and officers assented to patently unlawful acts of the bank, or that they
were guilty of gross negligence or bad faith. Contrary to his claim, the
Complaint[290] in the lower court never alleged that individual defendants acquiesced
to an unlawful act or were grossly negligent or acted in bad faith.[291] Neither is there
any specific allegation of gross negligence or action in bad faith that is attributable
to the individual defendants in performance of their official duties.
In any event, Peña did not adduce any proof that the eight individual
defendants performed unlawful acts or were grossly negligent or in bad faith. Aside
from the general allegation that they were corporate officers or members of the board
of directors of Urban Bank, no specific acts were alleged and proved to warrant
a finding of solidary liability. At most, petitioners Borlongan, Bejasa and Manuel
were identified as those who had processed the agency agreement with Peña through
their telephone conversations with him and/or written authorization letter.

4. PRESCRIPTIVE PERIOD OF MONEY CLAIMS

PLDT vs Pingol4

Held:

With regard to the prescriptive period for money claims, Article 291 of
the Labor Code states:

Article 291. Money Claims. All money claims arising from

employer-employee relations accruing during the effectivity of
this Code shall be filed within three (3) years from the time the
cause of action accrued; otherwise they shall be barred forever.

In the case at bench, Pingol himself alleged the date January 1, 2000 as the
date of his dismissal in his complaint[20] filed on March 29, 2004, exactly four (4)
years and three (3) months later. Respondent never denied making such admission
or raised palpable mistake as the reason therefor. Thus, the petitioner correctly relied
on such allegation in the complaint to move for the dismissal of the case on the
ground of prescription.

The Labor Code has no specific provision on when a claim for illegal dismissal
or a monetary claim accrues. Thus, the general law on prescription
applies. Article 1150 of the Civil Code states:

4 http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/182622.htm
 Article 1150. The time for prescription for all kinds of actions,
when there is no special provision which ordains otherwise, shall
be counted from the day they may be brought. (Emphasis supplied)

The day the action may be brought is the day a claim starts as a legal
possibility.[21] In the present case, January 1, 2000 was the date that respondent
Pingol was not allowed to perform his usual and regular job as a maintenance
technician. Respondent Pingol cited the same date of dismissal in his complaint
before the LA.As, thus, correctly ruled by the LA, the complaint filed had already
prescribed.

Respondent claims that between 2001 and 2003, he made follow-ups with PLDT
management regarding his benefits. This, to his mind, tolled the running of the
prescriptive period.

The rule in this regard is covered by Article 1155 of the Civil Code. Its
applicability in labor cases was upheld in the case of International Broadcasting
Corporation v. Panganiban[22] where it was written:

Like other causes of action, the prescriptive period for money

claims is subject to interruption, and in the absence of an
equivalent Labor Code provision for determining whether the
said period may be interrupted, Article 1155 of the Civil Code may
be applied, to wit:

ART. 1155. The prescription of actions is interrupted when

they are filed before the Court, when there is a written extrajudicial
demand by the creditors, and when there is any written
acknowledgment of the debt by the debtor.

Thus, the prescription of an action is interrupted by (a) the

filing of an action, (b) a written extrajudicial demand by the
 creditor, and (c) a written acknowledgment of the debt by the
debtor.

In this case, respondent Pingol never made any written extrajudicial

demand. Neither did petitioner make any written acknowledgment of its
alleged obligation. Thus, the claimed follow-ups could not have validly tolled
the running of the prescriptive period. It is worthy to note that respondent
never presented any proof to substantiate his allegation of follow-ups.

Unfortunately, respondent Pingol has no one but himself to blame for his
own predicament. By his own allegations in his complaint, he has barred his
remedy and extinguished his right of action. Although the Constitution is
committed to the policy of social justice and the protection of the working class, it
does not necessary follow that every labor dispute will be automatically decided in
favor of labor. The management also has its own rights. Out of Its concern for the
less privileged in life, this Court, has more often than not inclined, to uphold the
cause of the worker in his conflict with the employer. Such leaning, however, does
not blind the Court to the rule that justice is in every case for the deserving, to be
dispensed in the light of the established facts and applicable law and doctrine.[23]