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WPP MARKETING COMMUNICATIONS v. JOCELYN M. GALERA

FACTS:

Jocelyn M. Galera, an American citizen, was recruited by John Steedman, Chairman-WPP Worldwide, to work for WPP Marketing Communications, Inc. (WPP) in the Philippines. She signed an Employment Contract which detailed her position, salary, benefits, and other terms of employment. Galera's employment with WPP commenced on September 1, 1999.

After four months, WPP filed an application for Galera's working visa, designating her as Vice President of WPP. However, on December 14, 2000, Steedman verbally informed Galera that her services were terminated, and a termination letter followed the next day. Galera was not given an opportunity to defend herself or explain her side and received the written notice of termination only on December 15, 2000.

Galera filed a complaint for illegal dismissal and various monetary benefits against WPP, Steedman, and others. The Labor Arbiter ruled in Galera's favor, finding WPP liable for illegal dismissal and damages. The arbiter held that WPP failed to observe the two-notice rule and did not provide Galera with an opportunity to defend herself.

The NLRC, however, reversed the arbiter's ruling, considering Galera as a corporate officer of WPP at the time she was terminated. The NLRC emphasized that Galera's election as Vice President was subject to SEC approval, which was granted in February 2001. The NLRC held that Galera continued to hold her position as Vice President until her successor was duly elected and qualified.

Galera argued that she was elected as Vice President on December 31, 1999, and under corporation law, she should continue to hold the position until a successor has been elected and qualified. The recent ruling in Nacpil v. International Broadcasting Corp. expanded the definition of a corporate officer, which included a Comptroller/Assistant Manager. Galera claimed that since she was not replaced and continued to perform the same functions, she should be considered a corporate officer. The NLRC considered Galera's case as an intra-corporate dispute falling under the jurisdiction of the SEC or commercial courts. However, the Court of Appeals set aside the NLRC's decision, ruling that a person can only be considered a corporate officer if appointed by the corporation's Board of Directors or pursuant to the Articles of Incorporation or By-Laws.

ISSUES:

  1. Whether the NLRC has jurisdiction over Galera's complaint.

  2. Whether Galera is an employee or a corporate officer.

  3. Whether Galera is entitled to backwages and other benefits despite being an alien.

  4. Whether the individual respondents (Steedman, Webster, and Lansang) should be held solidarily liable with WPP for Galera’s dismissal.

RULING:

  1. The Supreme Court ruled that the NLRC has jurisdiction over the case as Galera is considered an employee rather than a corporate officer.

  2. Galera is deemed a regular employee and not a corporate officer based on the by-laws of WPP and the nature of her employment.

  3. Despite being an alien, Galera is entitled to the computed monetary award, but her failure to secure an employment permit before her employment bars her from claiming the full benefits under Philippine labor laws.

  4. The case should be partially granted, with the decision of the Court of Appeals set aside. The Supreme Court did not explicitly rule on the solidary liability of the individual respondents with WPP in the provided text.

PRINCIPLES:

  1. Corporate Officer vs. Employee: Corporate officers are defined by the Corporation Code or the corporation's by-laws. For a person to be considered a corporate officer, the position must be one recognized by the by-laws.

  2. Jurisdiction of Labor Arbiters and NLRC: Under Article 217 of the Labor Code, Labor Arbiters and the NLRC have original and exclusive jurisdiction over cases involving employee-employer relationships, including termination disputes.

  3. Employment of Aliens: Aliens must secure an employment permit from the Department of Labor before engaging in employment in the Philippines, as specified in the Labor Code and its implementing rules.

  4. Procedural and Substantive Due Process in Dismissal: Employers must provide employees with two written notices before termination—the notice of specific acts or omissions and the subsequent notice of the decision to dismiss. Failure to comply results in illegal dismissal.

  5. Unclean Hands Doctrine: A party cannot seek relief from the court if they come with unclean hands, i.e., if they have violated the laws they now seek to benefit from.