JURISDICTION OF LABOR ARBITER CASES:

SAN MIGUEL CORP. VS NLRC

GR No. 108001
FACTS:
Private respondents, employed by petitioner San Miguel Corporation (SMC) as
mechanics, machinists, and carpenters, were and still are, bona fide officers and members of
private respondent Ilaw at Buklod ng Manggagawa. They were served a Memorandum from
petitioner Angel G. Roa, Vice-President and Manager of SMCs Business Logistics Division
(BLD), to the effect that they had to be separated from the service on the ground of redundancy
or excesses personnel. Respondent union, in behalf of private respondents, opposed the
intended dismissal and asked for a dialogue with management. Accordingly, a series of dialogues
were held between petitioners and private respondents. Even before the conclusion of said
dialogues, Angel Roa issued another Memorandum informing private respondents that they
would be dismissed from work effective as of the close of business hours. Thus, private
respondents filed a complaint against petitioners for Illegal Dismissal and Unfair Labor
Practices. The complaint was assigned to Labor Arbiter Eduardo F. Carpio for hearing and proper
disposition.
Petitioners filed a motion to dismiss the complaint, alleging that respondent Labor Arbiter
had no jurisdiction over the subject matter of the complaint, and that respondent Labor Arbiter
must defer consideration of the unfair labor practice complaint until after the parties have gone
through the grievance procedure provided for in the existing Collective Bargaining Agreement
(CBA). Respondent Labor Arbiter denied this motion. The petitioners appealed the denial to
respondent Commission. Unimpressed by the grounds, respondent Commission dismissed the
appeal. Petitioners promptly filed Motion for Reconsideration which was denied also. Hence the
instant petition for certiorari.
ISSUE:
Whether or not the Labor Arbiter has no jurisdiction over the alleged illegal termination
and alleged ULP cases without prior resort to grievance and arbitration provided under CBA.
RULING:
The argument of the petitioners is unmeritorious. The law in point is Article 217 (a) of the
Labor Code, which provides that termination disputes, together with unfair labor practices, are
matters falling under the original and exclusive jurisdiction of the Labor Arbiter, to wit:

Article 217. Jurisdiction of Labor Arbiters and the Commission - (a) Except as
otherwise provided under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide x x x the following cases involving all workers, whether
agricultural or non-agricultural:
(1) Unfair labor practice cases:
(2) Termination disputes;
The sole exception to the above rule can be found under Article 262 of the same Code, which
provides:
Aricle 262. Jurisdiction over other labor disputes - The voluntary arbitrator or panel of
voluntary arbitrators, upon agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks.
There was no agreement between SMC and the respondent union that would state in
indisputable language that petitioners and the respondent union conform to the submission of
termination disputes and unfair labor practices to voluntary arbitration. Hence, consistent with
the general rule under Article 217 (a) of the Labor Code, the Labor Arbiter properly has
jurisdiction over the complaint filed by the respondent union for illegal dismissal and unfair
labor practice.

PASTOR DIONISIO V. AUSTRIA VS NLRC

GR No. 124382
FACTS:
Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day
Adventists (hereinafter referred to as the SDA) is a religious corporation duly organized and
existing under Philippine law and is represented in this case by the other private respondents,
officers of the SDA. Petitioner, on the other hand, was a Pastor of the SDA until 31 October
1991, when his services were terminated. On various occasions from August up to October,
1991, petitioner received several communications from Mr. Eufronio Ibesate, the treasurer of the
Negros Mission asking him to admit accountability and responsibility for the church tithes and
offerings collected by his wife, Mrs. Thelma Austria, in his district which amounted to
P15,078.10, and to remit the same to the Negros Mission. Petitioner reasoned out that he should
not be made accountable for the unremitted collections since it was private respondents Pastor
Gideon Buhat and Mr. Eufronio Ibesate who authorized his wife to collect the tithes and
offerings since he was very sick to do the collecting at that time. Thereafter, on 16 October 1991,
petitioner went to the office of Pastor Buhat, the president of the Negros Mission and the two

exchanged heated arguments which resulted with the petitioner to bang the attach case of Pastor
Buhat on the table, scattered the books in his office, and threw the phone. Subsequently, on 29
October 1991, petitioner received a letter of dismissal citing misappropriation of denominational
funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties, and
commission of an offense against the person of employers duly authorized representative, as
grounds for the termination of his services. Thus, petitioner filed a complaint before the Labor
Arbiter for illegal dismissal against the SDA.
Labor Arbiter Cesar D. Sideo rendered a decision in favor of petitioner. The SDA,
through its officers, appealed the decision of the Labor Arbiter to the National Labor Relations
Commission. In a decision, the NLRC vacated the findings of the Labor Arbiter. Petitioner filed a
motion for reconsideration; the NLRC issued a Resolution reversing its original decision. In view
of the reversal of the original decision of the NLRC, the SDA filed a motion for reconsideration,
alleging that that the Labor Arbiter has no jurisdiction over the complaint filed by petitioner due
to the constitutional provision on the separation of church and state since the case allegedly
involved and ecclesiastical affair to which the State cannot interfere. The NLRC, without ruling
on the merits of the case, reversed its decision once again; sustaining the argument posed by
private respondents and, accordingly, dismissed the complaint of petitioner, hence, the recourse
to the court by the petitioner.
ISSUES:
1) Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the
complaint filed by petitioner against the SDA;
2) Whether or not the termination of the services of petitioner is an ecclesiastical affair,
and, as such, involves the separation of church and state;
RULINGS:
The principle of separation of church and state finds no application in this case. While the
State is prohibited from interfering in purely ecclesiastical affairs, the Church is likewise barred
from meddling in purely secular matters. What is involved here is the relationship of the church
as an employer and the minister as an employee. It is purely secular and has no relation
whatsoever with the practice of faith, worship or doctrines of the church. In this case, petitioner
was not excommunicated or expelled from the membership of the SDA but was terminated from
employment. Indeed, the matter of terminating an employee, which is purely secular in nature, is
different from the ecclesiastical act of expelling a member from the religious congregation.
the grounds invoked for petitioners dismissal, namely: misappropriation of
denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of
duties and commission of an offense against the person of his employers duly authorize
representative, are all based on Article 282 of the Labor Code which enumerates the just causes

for termination of employment. It is clear that the reason for petitioners dismissal from the
service is not religious in nature. SDA even registered petitioner with the Social Security System
(SSS) as its employee. It is clear that when the SDA terminated the services of petitioner, it was
merely exercising its management prerogative to fire an employee which it believes to be unfit
for the job. As such, the State, through the Labor Arbiter and the NLRC, has the right to take
cognizance of the case and to determine whether the SDA, as employer, rightfully exercised its
management prerogative to dismiss an employee. This is in accordance with the mandate of the
Constitution to afford full protection to labor. Under the Labor Code, the provision which
governs the dismissal of employees is comprehensive enough to include religious corporations,
such as the SDA, in its coverage. Article 278 of the Labor Code on post-employment states that
the provisions of this Title shall apply to all establishments or undertakings, whether for profit
or not. the cited article does not make any exception in favor of a religious corporation. Private
respondents are estopped from raising the issue of lack of jurisdiction for the first time on appeal
since the SDA had fully participated in the trials and hearings of the case from start to finish.

FORTUNE CEMENT VS. NLRC

GR No. 79762
FACTS:
Lagdameo is a registered stockholder of FCC. He was elected Executive Vice-President
of FCC. Some eight (8) years later, the FCC Board resolved that all of its incumbent corporate
officers, including Lagdameo, would be "deemed" retained in their respective positions without
necessity of yearly reappointments, unless they resigned or were terminated by the Board.
Thereafter, the company dismissed Lagdameo as Executive Vice-President of the company on
the ground for loss of trust and confidence. Lagdameo filed with the National Labor Relations
Commission (NLRC), National Capital Region, a complaint for illegal dismissal against FCC
alleging that his dismissal was done without a formal hearing and investigation and, therefore,
without due process. FCC moved to dismiss Lagdameo's complaint on the ground that his
dismiss as a corporate officer is a purely intra-corporate controversy over which the Securities
and Exchange Commission (SEC) has original and exclusive jurisdiction.
The Labor Arbiter granted the motion to dismiss. On appeal, however, the NLRC set
aside the Labor Arbiter's order and remanded the case to the Arbitration Branch "for appropriate
proceedings". The NLRC denied FCC's motion for reconsideration. Dissatisfied, FCC filed this
petition for certiorari.

ISSUE:
Whether or not the NLRC has jurisdiction over a complaint filed by a corporate executive
vice-president for illegal dismissal resulting from a board resolution dismissing him as such
officer.
RULINGS:
The Solicitor General, declining to defend public respondent in its pleading entitled
"Manifestation in Lieu of Comment," aptly observed:
The position of "Executive Vice-President," from which private respondent Lagdameo
claims to have been illegally dismissed, is an elective corporate office. He himself acquired that
position through election by the corporation's Board of Directors, although he also lost the same
as a consequence of the latter's resolution.
Indeed the election, appointment and/or removal of an executive vice-president is a
prerogative vested upon a corporate board.
And it must be, not only because it is a practice observed in petitioner Fortune Cement
Corporation, but more so, because of an express mandate of law.
The Solicitor General pointed out that "a corporate officer's dismissal is always a
corporate act and/or intra-corporate controversy and that nature is not altered by the reason or
wisdom which the Board of Directors may have in taking such action."
Lagdameo claims that his dismissal was wrongful, illegal, and arbitrary, because the
"irregularities" charged against him were not investigated); that the case of PSBA vs. Leao cited
by the Labor Arbiter finds no application to his case because it is not a matter of corporate office
having been declared vacant but one where a corporate officer was dismissed without legal and
factual basis and without due process; that the power of dismissal should not be confused with
the manner of exercising the same; that even a corporate officer enjoys security of tenure
regardless of his rank and that the SEC is without power to grant the reliefs prayed for in his
complaint.
The questioned Resolution of the NLRC reversing the decision of the Labor Arbiter,
having been rendered without jurisdiction, is hereby reversed and set aside. The decision of the
Labor Arbiter dismissing is affirmed.