Estrada v. NLRC

G.R. No. 106722 (October 4, 1996)

Facts:

Petitioner Josemaria G. Estrada served as the Senior Vice-President for the Marketing Group of Philippine Airlines, Inc. (PAL). In June 1990, he was implicated in a significant financial anomaly involving PAL, which led to administrative charges against him and a preventive suspension. Following an investigation, the committee recommended his dismissal. On December 27, 1990, PAL's Board of Directors declared him resigned effective immediately, citing "loss of confidence and acts inimical to the interest of the company."

Estrada contested his dismissal by filing a complaint for illegal dismissal before a Labor Arbiter, seeking backwages, damages, and other benefits. The Labor Arbiter ruled in his favor, declaring the dismissal illegal and ordering his reinstatement along with the payment of backwages and benefits. However, PAL appealed the decision to the National Labor Relations Commission (NLRC), which reversed the Labor Arbiter's ruling, asserting that the case fell under the jurisdiction of the Securities and Exchange Commission (SEC) due to its nature as an intra-corporate controversy.

Estrada's subsequent motion for reconsideration was denied, prompting him to file a petition for certiorari with the Supreme Court, raising two primary issues: (1) whether the NLRC had jurisdiction over his illegal termination case, and (2) whether PAL was estopped from questioning the NLRC's jurisdiction.

Legal Issues:

1. Does the NLRC have jurisdiction over the illegal termination case filed by Estrada?
2. Is PAL estopped from questioning the jurisdiction of the NLRC?

Arguments:

• Petitioner (Estrada): Estrada argued that the NLRC had jurisdiction over his case as it involved illegal dismissal, which typically falls under the purview of labor arbiters. He contended that the claims for backwages and damages were sufficient to establish the NLRC's jurisdiction.

• Respondent (PAL): PAL countered that the case was an intra-corporate controversy, which should be addressed by the SEC. They cited previous cases where the dismissal of corporate officers was deemed a corporate act, thus falling outside the jurisdiction of labor arbiters. PAL also argued that they had consistently questioned the jurisdiction of the labor arbiter from the outset.

Court's Decision and Legal Reasoning:

The Supreme Court dismissed Estrada's petition, affirming the NLRC's ruling. The Court reasoned that the issues raised had already been addressed in prior cases involving other executives of PAL who were similarly dismissed. The Court reiterated that the dismissal of a corporate officer is inherently a corporate act and falls under the SEC's jurisdiction, particularly when it is intertwined with intra-corporate affairs, such as the financial anomaly in question.

The Court emphasized that the nature of the claims for backwages and damages did not alter the jurisdictional issue, as these claims were linked to Estrada's position as a corporate officer. The Court also ruled that PAL was not estopped from questioning the jurisdiction of the NLRC, as jurisdiction is conferred by law and can be challenged at any stage of the proceedings.

Significant Legal Principles Established:

1. The dismissal of corporate officers is classified as an intra-corporate controversy, which falls under the exclusive jurisdiction of the SEC, regardless of the claims for backwages or damages.
2. Jurisdiction over a subject matter is determined by law and can be questioned at any time, even on appeal.
3. The nature of the claims made by a corporate officer does not change the jurisdictional authority over disputes involving their dismissal.