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WESLEYAN UNIVERSITY-PHILIPPINES v. GUILLERMO T. MAGLAYA

FACTS:

The petitioner, Wesleyan University-Philippines (WUP), is a non-stock, non-profit, non-sectarian educational corporation. Respondent Atty. Guillenno T. Maglaya, Sr. (Maglaya) was appointed as a corporate member on January 1, 2004, and was elected as a member of the Board of Trustees (Board) on January 9, 2004. He was later elected as President of the University for a five-year term and was re-elected as a trustee in 2007. On December 31, 2008, the corporate terms of the members expired unless renewed by the Bishops of the United Methodist Church (the Bishops). Maglaya and other former members of the Board sought the renewal of their membership but were informed by the Chairman of the Board that their terms had ceased and the vacancies would only be filled upon the recommendation of the Board. The Bishops created an Ad Hoc Committee to plan the turnover of the administration, appointing new corporate members and trustees. On April 27, 2009, Maglaya received notice of termination of his services and authority as President. Maglaya and other former members of the Board filed a complaint for injunction and damages, which was dismissed by the RTC. The CA affirmed the dismissal, stating that their status as corporate members expired, leading to the termination of their positions as Board members. Maglaya then filed an illegal dismissal case claiming he was unceremoniously dismissed in 2009.

This case involves an illegal dismissal complaint filed by respondent Maglaya against petitioner Western Mindanao University (WUP). Maglaya was appointed as the President of the University by the Board of Trustees for a fixed period of five years, from May 7, 2005, to May 6, 2010. However, his appointment was not renewed, and he was subsequently terminated by the Board.

The Labor Arbiter initially dismissed the complaint for lack of jurisdiction, stating that the case involved an intra-corporate dispute beyond the jurisdiction of labor tribunals. The National Labor Relations Commission (NLRC), on the other hand, reversed the Labor Arbiter's decision and ruled in favor of Maglaya, stating that his dismissal was illegal. The NLRC held that although Maglaya held a corporate office as the President of the University, he was an employee and subordinate based on the manner of his appointment and the control exercised by the Board.

The NLRC awarded separation pay, full backwages, retirement pay, moral damages, exemplary damages, and attorney's fees to Maglaya. WUP filed a petition for certiorari before the Court of Appeals (CA), which dismissed the petition for lack of merit. WUP then elevated the case to the Supreme Court, questioning the jurisdiction of the NLRC over the case.

ISSUES:

  1. Whether the NLRC had jurisdiction over the illegal dismissal case filed by Maglaya.

  2. Whether Maglaya was a mere employee or a corporate officer of Wesleyan University-Philippines (WUP).

RULING:

  1. The Supreme Court ruled that the NLRC had no jurisdiction over the case as it involved an intra-corporate controversy, which falls within the jurisdiction of the regular courts.

  2. The Court held that Maglaya was a corporate officer, not a mere employee, per the by-laws of WUP.

PRINCIPLES:

  1. Jurisdiction on Intra-Corporate Controversies: Jurisdiction over intra-corporate disputes is conferred by law and lies with the regional trial courts, not with labor tribunals.

  2. Corporate Officer Definition: Officers who are designated as such by the by-laws or the Corporation Code are corporate officers. A corporate officer's status is not determined by the manner of appointment, duties, or compensation.

  3. Creation and Election of Corporate Officers: The creation of the officer position in the corporation's charter or by-laws and the election of the officer by the directors or stockholders are critical in determining if an individual is a corporate officer.

  4. Doctrine of Immutability of Judgment: While judgments become final after a set period, they may be assailed via a special civil action of certiorari under Rule 65 of the Rules of Court on jurisdictional grounds.

  5. Void Judgments and Non-Jurisdiction: A void judgment due to lack of jurisdiction has no legal effect, cannot become final, and cannot be the basis of any right or obligation.