Case Digest: Ma. Mercedes L. Barba v. Liceo De Cagayan University, G.R. No. 193857, November 28, 2012

    Labor Law | Powers and Duties 

• Dr. Ma. Mercedes Barba received a scholarship grant from Liceo de Cagayan University, Inc. to pursue a three-year residency training in Rehabilitation Medicine at the Veterans Memorial Medical Center (VMMC).
• After completing her residency, Barba returned to work for Liceo de Cagayan University and was appointed Acting Dean of the College of Physical Therapy and Doctor-In-Charge of the Rehabilitation Clinic. Barba's appointments were renewed, and she was later appointed as the Dean of the College of Physical Therapy.
• When the College of Physical Therapy faced a significant decline in enrollees during the 2003-2004 school year, Liceo de Cagayan University decided freeze the operation of the College indefinitely.
• The College of Physical Therapy ceased operations, and Barba went on leave without pay.
• Barba was instructed to return to work in the College of Nursing, reporting to the Acting Dean, to receive a teaching load and assignment as a full-time faculty member.
• Barba expressed her disagreement, stating that her employment was not dependent on a teaching load and requested the processing of her separation benefits due to the closure of the College of Physical Therapy.
• The university issued a letter directing Barba to report for work and teach her assigned subjects, warning of dismissal for abandonment if she failed to comply.
• Barba, through counsel, argued that teaching in the College of Nursing was unrelated to her scholarship and training in rehabilitation medicine. Dr. Magdale issued a notice terminating Barba's services for abandonment.
• Prior to her termination, Barba filed a complaint for illegal dismissal against Dr. Magdale and Dr. Golez, alleging that her transfer to the College of Nursing amounted to constructive dismissal.
• Labor Arbiter: Found that Barba was not constructively dismissed.
• NLRC: Reversed the decision, ruling that she was indeed constructively dismissed.
• Respondent filed a Supplemental Petition, introducing the issue of lack of jurisdiction of the LA and the NLRC over the case.
• That a College Dean is a corporate officer under its by-laws, and petitioner and the appointment was approved by the board of directors.
• CA: Initially reversed the NLRC but changed its stance and concluded that he position of a College Dean is a corporate office, and therefore, the labor tribunals had no jurisdiction over the complaint for constructive dismissal.
• However, respondent's active participation in the proceedings estopped it from questioning the jurisdiction of the labor tribunals.

WoN petitioner was an employee and not a corporate officer of respondent university. YES

Section 2, Rule 52 of the 1997 Rules of Civil Procedure, as amended, provides that no second motion for reconsideration of a judgment or final resolution by the same party shall be entertained. This contemplates a situation where a second motion for reconsideration is filed by the same party assailing the same judgment or final resolution. 

Here, the motion for reconsideration of petitioner was filed after the appellate court rendered an Amended Decision totally reversing and setting aside its previous ruling. Hence, petitioner is not precluded from filing another motion for reconsideration from the Amended Decision which held that the labor tribunals lacked jurisdiction over petitioner’s complaint for constructive dismissal. The period to file an appeal should be reckoned not from the denial of her motion for reconsideration of the original decision, but from the date of petitioner’s receipt of the notice of denial of her motion for reconsideration from the Amended Decision.

As a general rule, only questions of law may be allowed in a petition for review on certiorari. Considering, however, that the CA reversed its earlier decision and made a complete turnaround from its previous ruling, and consequently set aside both the findings of the Labor Arbiter and the NLRC for allegedly having been issued without jurisdiction, it is necessary for the Court to reexamine the records and resolve the conflicting rulings.

Corporate officers are elected or appointed by the directors or stockholders, and are those who are given that character either by the Corporation Code or by the corporation’s by-laws. 

Section 25 of the Corporation Code enumerates corporate officers as the president, the secretary, the treasurer and such other officers as may be provided for in the by-laws. In Matling Industrial and Commercial Corporation v. Coros, 633 SCRA 12 (2010), the phrase “such other officers as may be provided for in the by-laws” has been clarified, thus: Conformably with Section 25, a position must be expressly mentioned in the By-

Laws in order to be considered as a corporate office. 

Thus, the creation of an office pursuant to or under a By-Law enabling provision is not enough to make a position a corporate office. Guerrea v. Lezama, the first ruling on the matter, held that the only officers of a corporation were those given that character either by the Corporation Code or by the By-Laws; the rest of the corporate officers could be considered only as employees of subordinate officials. Thus, it was held in Easycall Communications Phils., Inc. v. King: An “office” is created by the charter of the corporation and the officer is elected by the directors or stockholders. On the other hand, an employee occupies no office and generally is employed not by the action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee.

True, the By-Laws of [Liceo de Cagayan University] provides that there shall be a College Director. This means a College Director is a corporate officer. However, contrary to the allegation of petitioner, the position of Dean does not appear to be the same as that of a College Director. A College Director is directly appointed by the Board of Directors. However, a College Dean is appointed by the President upon the recommendation of the Vice President for Academic Affairs and the Executive Vice President and approval of the Board of Directors. Petitioner is not a College Director and she is not a corporate

officer but an employee of respondent. Being an employee of respondent, her complaint for illegal/constructive dismissal against respondent was properly within the jurisdiction of the Labor Arbiter and the NLRC.

We have consistently held that while jurisdiction may be assailed at any stage, a party’s active participation in the proceedings will estop such party from assailing its jurisdiction. It is an undesirable practice of a party participating in the proceedings and submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse.

In constructive dismissal cases, the employer has the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. Particularly, for a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee. In this case, petitioner’s transfer was not unreasonable, inconvenient or prejudicial to her. On the contrary, the assignment of a teaching load in the College of Nursing was undertaken by respondent to accommodate petitioner following the closure of the College of Physical Therapy. Respondent further considered the fact that petitioner still has two years to serve the university under the Scholarship Contract.