Tabang vs. NLRC

The dismissal or removal of a corporate officer, who is also a member of the Board of Trustees, by the Board of Directors or Trustees constitutes an intra-corporate controversy within the exclusive original jurisdiction of the Securities and Exchange Commission (SEC) under Section 5(c) of Presidential Decree No. 902-A, and not a labor dispute subject to the jurisdiction of the Labor Arbiter or NLRC, even if accompanied by claims for unpaid salaries or other monetary benefits.

The dispute arises from the termination of a medical professional who occupied dual roles in a non-stock, non-profit medical foundation: as a member of the Board of Trustees (and corporate secretary) and as an executive officer (Medical Director and Hospital Administrator). The case clarifies the jurisdictional boundaries between labor tribunals and the SEC regarding the removal of corporate officers, particularly when the officer is also a director or trustee, and establishes the criteria for distinguishing between corporate officers (whose removal is an intra-corporate matter) and ordinary employees (whose dismissal falls under labor laws).

• Petitioner Purificacion Tabang was a founding member, a member of the Board of Trustees, and the corporate secretary of private respondent Pamana Golden Care Medical Center Foundation, Inc., a non-stock, non-profit corporation engaged in providing medical and surgical services.
• On October 30, 1990, the Board of Trustees issued a memorandum appointing petitioner as Medical Director and Hospital Administrator of the Calamba, Laguna branch, tasking her with running the affairs of the medical center and performing all acts of administration relative to its daily operations.
• The appointment memorandum stated: "We hope that you will uphold and promote the mission of our foundation," indicating her fiduciary duty as a trustee.
• Petitioner claimed she received a monthly retainer fee of P5,000.00 until November 1991, but the vouchers submitted showed these payments were made by Pamana, Inc., a separate stock corporation selling pre-need plans, and not by respondent foundation.
• On April 30, 1993, the Board of Trustees held a special meeting and passed a resolution relieving petitioner of her positions as Medical Director and Hospital Administrator, appointing Dr. Ernesto Naval and Dr. Benjamin Donasco as replacements.
• Petitioner was personally informed of her removal on May 1, 1993, and subsequently received a copy of the board resolution.
• The corporation's by-laws (Section 2(i), Article I) granted the Board of Trustees the power "to appoint a Medical Director, Comptroller/Administrator, Chiefs of Services and such other officers as it may deem necessary and prescribe their powers and duties."
• Petitioner also served as a retained physician of Pamana, Inc., treating holders of the Pamana Golden Care Card, and had filed a separate civil case for professional fees against Pamana, Inc.

• The position of Medical Director and Hospital Administrator was separate and distinct from her position as a member of the Board of Trustees.
• She filed the complaint in her capacity as an employee (Medical Director and Hospital Administrator), not as a corporate trustee, hence no intra-corporate controversy existed.
• Her membership in the Board of Trustees was not one of the considerations for her appointment to the executive positions.
• The Labor Arbiter had jurisdiction over her claims for illegal dismissal and non-payment of wages, allowances, and 13th month pay.

• The positions of Medical Director and Hospital Administrator were interlinked with petitioner's position as a member of the Board of Trustees.
• The removal from these positions constituted an intra-corporate controversy falling within the exclusive original jurisdiction of the Securities and Exchange Commission (SEC) pursuant to Section 5 of Presidential Decree No. 902-A.
• The positions were corporate offices created by the by-laws and filled by appointment of the Board of Trustees, making petitioner a corporate officer rather than a mere employee.
• The monetary claims, if any, were merely incidental to the intra-corporate nature of the dispute.

• Procedural Issues:
  • Whether the Labor Arbiter and NLRC correctly dismissed the complaint for lack of jurisdiction over the subject matter.
• Substantive Issues:
  • Whether the removal of a corporate officer who simultaneously serves as a member of the Board of Trustees constitutes an intra-corporate controversy within the jurisdiction of the SEC.
  • Whether the positions of Medical Director and Hospital Administrator constitute corporate offices or mere employment.
  • Whether the presence of monetary claims for compensation affects the jurisdictional determination between labor tribunals and the SEC.

• Procedural:
  • The Supreme Court affirmed the NLRC resolution dismissing the case for lack of jurisdiction.
  • The Court held that the Labor Arbiter and NLRC correctly declined jurisdiction because the controversy falls squarely within the exclusive jurisdiction of the SEC as an intra-corporate controversy under Section 5(c) of Presidential Decree No. 902-A.
• Substantive:
  • Medical Director and Hospital Administrator are corporate officers under the corporation's by-laws, which explicitly grant the Board of Trustees the power to appoint these positions.
  • Petitioner is deemed a corporate officer, not a mere employee, because she was appointed by the Board of Trustees (the governing body) rather than by a managing officer of the corporation.
  • The dismissal of a corporate officer is always a corporate act and constitutes an intra-corporate controversy; the nature is not altered by the reason, wisdom, or monetary considerations involved in the Board's action.
  • The P5,000.00 monthly payments were actually made by Pamana, Inc., a separate and distinct stock corporation, and not by respondent foundation; however, even assuming these were valid claims against respondent, such monetary claims would not operate to remove the case from SEC jurisdiction because they are interlinked with the corporate position and constitute part of the perquisites of office.
  • Intra-corporate controversies are broadly defined to cover all kinds of controversies between stockholders and corporations without distinction or exemption.

• Distinction Between Corporate Officers and Employees — Corporate officers are created by the charter or by-laws and are elected or appointed by the directors or stockholders, while employees are employed by managing officers who determine their compensation. This distinction is crucial in determining whether dismissal is a labor dispute or an intra-corporate controversy subject to SEC jurisdiction.
• Intra-Corporate Controversy — Under Section 5(c) of Presidential Decree No. 902-A, the SEC exercises exclusive jurisdiction over controversies in the election or appointment of directors, trustees, officers, or managers of corporations. This provision is broad and covers all controversies between stockholders and corporations without distinction, qualification, or exemption.
• Corporate Act Doctrine — The dismissal of a corporate officer is always a corporate act or an intra-corporate controversy, and its nature is not altered by the reason or wisdom with which the Board of Directors or Trustees may have acted in taking such action.

• "A corporate officer's dismissal is always a corporate act, or an intra-corporate controversy, and the nature is not altered by the reason or wisdom with which the Board of Directors may have in taking such action."
• "An intra-corporate controversy is one which arises between a stockholder and the corporation. There is no distinction, qualification, nor any exemption whatsoever. The provision is broad and covers all kinds of controversies between stockholders and corporations."
• "Although the reliefs sought by Chavez appear to fall under the jurisdiction of the labor arbiter as they are claims for unpaid salaries and other remunerations for services rendered, a close scrutiny thereof shows that said claims are actually part of the perquisites of his position in, and therefore interlinked with, his relations with the corporation."

• Fortune Cement Corporation vs. NLRC — Cited for the doctrine that a corporate officer's dismissal is always a corporate act or intra-corporate controversy.
• SEC vs. Court of Appeals — Cited for the principle that the provision on intra-corporate controversies under PD 902-A is broad and covers all kinds of controversies between stockholders and corporations without distinction or exemption.
• Cagayan de Oro Coliseum, Inc. vs. Office of the Minister of Labor and Employment — Cited for the ruling that claims for remuneration involving corporate officers are actually part of the perquisites of their position and are interlinked with their corporate relations, thus constituting intra-corporate controversies.
• Dy vs. NLRC — Cited for the principle that questions of remuneration involving stockholders and officers are not simple labor problems but corporate controversies within the area of corporate affairs and management.

• Section 5(c) of Presidential Decree No. 902-A — Grants the SEC exclusive jurisdiction over controversies in the election or appointment of directors, trustees, officers, or managers of corporations, partnerships, or associations.
• Section 25 of the Corporation Code (Batas Pambansa Blg. 68) — Referenced regarding the designation of the president, vice-president, secretary, and treasurer as the principal or executive officers of a corporation.