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DEMETRIO ELLAO Y DELA VEGA v. BATANGAS I ELECTRIC COOPERATIVE

FACTS:

Demetrio V. Ellao, the petitioner, seeks to annul the decisions of the Court of Appeals (CA) in CA-G.R. SP No. 127281. The CA reversed the decisions of both the National Labor Relations Commission (NLRC) and the Labor Arbiter, stating lack of jurisdiction. Ellao, the General Manager of respondent Batangas I Electric Cooperative, Inc. (BATELEC I), was dismissed from his position. The CA ruled that Ellao's dismissal is considered an intra-corporate controversy falling under the jurisdiction of the Securities and Exchange Commission (SEC) and now with the regional trial courts, rather than the labor tribunals. Ellao filed a complaint for illegal dismissal and money claims against BATELEC I. The case involves the filing of a complaint against Ellao for irregularities in the discharge of his functions, his preventive suspension, the creation of a fact-finding body to investigate the charges against him, the recommendation for his termination, the issuance of a board resolution terminating Ellao, and the confirmation of his termination by the National Electrification Administration (NEA). The Labor Arbiter affirmed jurisdiction over the complaint, finding Ellao to have been illegally dismissed. BATELEC I appealed to the NLRC, but the appeal was denied. BATELEC I then filed a certiorari petition before the CA, which granted the petition and ruled that Ellao's dismissal is an intra-corporate controversy under the jurisdiction of the SEC.

ISSUES:

  1. The main issue in this case is whether jurisdiction over Ellao's complaint for illegal dismissal belongs to the labor tribunals or the regional trial courts.

  2. Whether the position of General Manager in BATELEC I is a corporate office.

  3. Whether the complaint for illegal dismissal filed by Ellao is an intra-cooperative dispute.

RULING:

  1. The Supreme Court ruled that complaints for illegal dismissal filed by a cooperative officer constitute an intra-cooperative controversy, and thus, jurisdiction over such cases belongs to the regional trial courts. The Court emphasized that registration with the Securities and Exchange Commission (SEC) is not the determining factor in establishing jurisdiction. It held that electric cooperatives organized under Presidential Decree No. 269 (P.D. 269) enjoy juridical personality and corporate powers similar to a corporation, regardless of registration with the SEC. Furthermore, termination disputes involving corporate officers are treated differently from illegal dismissal cases filed by ordinary employees. In this case, since Ellao is a corporate officer, the controversy falls under the jurisdiction of the regional trial courts.

  2. The position of General Manager in BATELEC I is a corporate office. The functions of the office, as provided in the By-Laws, clearly establish that it is a cooperative office.

  3. Ellao's complaint for illegal dismissal is an intra-cooperative dispute. It involves a dispute between a cooperative officer and the Board of Directors, and the nature of the dispute is not altered by the wisdom or reasons of the Board in taking such action.

PRINCIPLES:

  • Registration with the SEC is not the operative factor in determining jurisdiction over a dispute or controversy.

  • Electric cooperatives organized under P.D. 269 enjoy juridical personality and corporate powers similar to a corporation, regardless of SEC registration.

  • Termination disputes involving corporate officers are treated differently from illegal dismissal cases filed by ordinary employees.

  • The SEC's jurisdiction over intra-corporate disputes was transferred to the regional trial courts by Republic Act No. 8799 (The Securities Regulation Code).

  • A position must be expressly mentioned in the By-Laws to be considered a corporate office.

  • The creation of an office pursuant to or under a By-Law enabling provision is not enough to make it a corporate office; it may only be considered as an employee or subordinate official position.

  • The dismissal of an officer is a matter that falls within the conduct and management of the affairs of a cooperative, rendering it an intra-cooperative controversy.

  • Intra-cooperative disputes are within the jurisdiction of the Regional Trial Court, and not the Labor Arbiter or the National Labor Relations Commission.