CASE DIGEST
Easycall Communications
Phils., Inc. vs. Edward King
G.R. No. 145901, December
15, 2005
THIRD DIVISION, CORONA J.
Corporate Office; Distinction
between corporate officer and employee, and the proper jurisdiction
Corporate officers in the context of Revised
Corporation Code are those officers of a corporation who are given that
character either by the Corporation Code or by the corporation’s by-laws.
Edward King was initially hired by Easycall Communications as Assistant to the General Manager and later promoted to Vice President for Nationwide Expansion. His appointment and compensation were determined by the General Manager, not the Board of Directors. Due to alleged poor sales performance and excessive time spent in the field, the company asked for his resignation. When King refused, he was issued a notice of termination, citing loss of confidence. King filed a complaint for illegal dismissal before the NLRC. The Labor Arbiter ruled that his termination was valid due to loss of trust and confidence, which the NLRC affirmed. However, the NLRC also dismissed the case on jurisdictional grounds, holding that King was a corporate officer, and thus, his dismissal was an intra-corporate controversy within the jurisdiction of the SEC (under PD 902-A).
King elevated the case to the Court of Appeals, which reversed the NLRC’s findings. The CA ruled that King was not a corporate officer as defined by the Corporation Code and that the NLRC had jurisdiction over his complaint. The appellate court further held that King was illegally dismissed, as there was no sufficient factual basis for loss of confidence and the requirements of due process were not complied with. The case was then brought before the Supreme Court via a petition for review on certiorari.
Whether or not Edward King was a
corporate officer or an employee for jurisdictional purposes.
NO. The
Supreme Court denied the petition and affirmed the decision of the Court of
Appeals. The Court ruled that Edward King was not a corporate officer within
the purview of the Corporation Code or the company’s by-laws. Citing Section 25
of the Corporation Code, the Court emphasized that corporate officers are those
who are either expressly mentioned in the Code—namely, the president,
secretary, and treasurer—or those created by the corporation’s by-laws. Since
Easycall failed to prove that the position of Vice President for Nationwide
Expansion was created by its by-laws, and because King was appointed by the
General Manager rather than elected by the Board of Directors, he could not be
considered a corporate officer. As such, his removal did not fall under the
jurisdiction of the SEC (as provided under PD 902-A) but under the NLRC,
pursuant to the Labor Code.
Whether or not Edward King is illegally dismissed.
YES. On the matter of the dismissal, the
Court found that the alleged loss of trust and confidence was not supported by
clearly established facts. The grounds cited by Easycall—King’s sales
performance and time spent in the field—were found insufficient to justify
dismissal. In fact, the company had previously praised his performance for the
same period it later criticized, even promoting him twice during that time.
This inconsistency weakened the credibility of Easycall’s claim of loss of
confidence. Moreover, the company failed to observe due process, as King was
given only one notice—of his termination—and was not given the opportunity to
respond to specific charges in a formal setting. The mere existence of internal
dialogues did not satisfy the requirement for notice and hearing.
Since petitioner failed to satisfy the
burden of proof that was required of it, we cannot sanction its claim that
respondent was a ‘corporate officer’ whose removal was cognizable by the SEC
under PD 902-A and not by the NLRC under the Labor Code.
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