Case Digest: WPP Marketing v. Galera, G.R. No. 169207, March 25, 2010

  Labor Law | NLRC

  • Petitioner Jocelyn Galera is an American citizen recruited by private respondents, a corporation based in Hong Kong, China, to work in the Philippines for WPP Marketing Communcations Inc. (WPP), effective on September 1, 1999. 
  • Four months passed when WPP filed before the Bureau of Immigration an application for petitioner to receive a working visa. Petitioner was designated as Vice President of WPP. 
  • On December 14, 2000, she was verbally notified by private respondent of her termination and a termination letter followed the next day. 
  • She filed a complaint for illegal dismissal, damages and backwages against them. 

WoN is an Employee and not a Corporate Officer. YES

Galera, on the belief that she is an employee, filed her complaint before the Labor Arbiter. On the other hand, WPP, Steedman, Webster and Lansang contend that Galera is a corporate officer; hence, any controversy regarding her dismissal is under the jurisdiction of the Regional Trial Court. We agree with Galera.

Corporate officers are given such character either by the Corporation Code or by the corporation’s by-laws. Under Section 25 of the Corporation Code, the corporate officers are the president, secretary, treasurer and such other officers as may be provided in the by-laws. Other officers are sometimes created by the charter or by-laws of a corporation, or the board of directors may be empowered under the by-laws of a corporation to create additional offices as may be necessary.

An examination of WPP’s by-laws resulted in a finding that Galera’s appointment as a corporate officer (Vice-President with the operational title of Managing Director of Mindshare) during a special meeting of WPP’s Board of Directors is an appointment to a non-existent corporate office. WPP’s by-laws provided for only one Vice-President. At the time of Galera’s appointment on 31 December 1999, WPP already had one Vice-President in the person of Webster. Galera cannot be said to be a director of WPP also because all five directorship positions provided in the by-laws are already occupied. Finally, WPP cannot rely on its Amended By-Laws to support its argument that Galera is a corporate officer. The Amended By-Laws provided for more than one Vice-President and for two additional directors. Even though WPP’s stockholders voted for the amendment on 31 May 2000, the SEC approved the amendments only on 16 February 2001. Galera was dismissed on 14 December 2000. WPP, Steedman, Webster, and Lansang did not present any evidence that Galera’s dismissal took effect with the action of WPP’s Board of Directors.

The appellate court further justified that Galera was an employee and not a corporate officer by subjecting WPP and Galera’s relationship to the four-fold test: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished. The appellate court found:

x x x Sections 1 and 4 of the employment contract mandate where and how often she is to perform her work; sections 3, 5, 6 and 7 show that wages she receives are completely controlled by x x x WPP; and sections 10 and 11 clearly state that she is subject to the regular disciplinary procedures of x x x WPP.

Another indicator that she was a regular employee and not a corporate officer is Section 14 of the contract, which clearly states that she is a permanent employee — not a Vice-President or a member of the Board of Directors.

x x x x

Another indication that the Employment Contract was one of regular employment is Section 12, which states that the rights to any invention, discovery, improvement in procedure, trademark, or copyright created or discovered by petitioner GALERA during her employment shall automatically belong to private respondent WPP. Under Republic Act 8293, also known as the Intellectual Property Code, this condition prevails if the creator of the work subject to the laws of patent or copyright is an employee of the one entitled to the patent or copyright.

Another convincing indication that she was only a regular employee and not a corporate officer is the disciplinary procedure under Sections 10 and 11 of the Employment Contract, which states that her right of redress is through Mindshare’s Chief Executive Officer for the Asia-Pacific. This implies that she was not under the disciplinary control of private respondent WPP’s Board of Directors (BOD), which should have been the case if in fact she was a corporate officer because only the Board of Directors could appoint and terminate such a corporate officer.

Although petitioner GALERA did sign the Alien Employment Permit from the Department of Labor and Employment and the application for a 9(g) visa with the Bureau of Immigration – both of which stated that she was private respondent’s WPP’ Vice President – these should not be considered against her. Assurming arguendo that her appointment as Vice-President was a valid act, it must be noted that these appointments occurred afater she was hired as a regular employee. After her appointments, there was no appreciable change in her duties.20

Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction over the present case as provided in the Article 217 of the Labor Code.

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