Dy vs. National Labor Relations CommissionNo. L-68544.

October 27, 1986

FACTS:

Petitioners Lorenzo C. Dy assails the Court the resolution of public respondent NLRC dismissing their
appeal fromthe decision of the Executive Labor Arbiter in Cebu City

Private respondent Vailoces was the manager of the Rural Bank of Ayungon (Negros Oriental), abanking
institution. He was also a director and stockholder of thebank

In June 4, 1983 a special stockholders’ meeting that was called for the purpose of electing the members
of the bank’s Board of Directors. After the election, the new Board proceeded to elect the bank’s
executive officers. Private respondent Vailoces was not re-elected as bank manager. Because of this, the
Board passed a Resolution relieving him as bank manager

Vailoces filed a complaint for illegal dismissal and damages with the Ministry of Labor and Employment
against herein petitioners, asserting that an illegal stockholders’ meeting was held. In their answer,
petitioners denied the charge of illegal dismissal. The Executive Labor Arbiter found that Vailoces was
illegally dismissed due to the resentment of petitioners and ordered the individual petitioners Lorenzo
Dy and Zosimo Dy, Sr. to pay Vailoces jointly and severally tand reinstate the latter to his position as
bank manager, with additional backwages.

ISSUE:

Whether or not the SEC, and not respondent NLRC, has jurisdiction over the dispute.

HELD

Yes. The judgment of the Labor Arbiter and the resolution of the NLRC are void for lack of jurisdiction.
The underpayment of salary and non-payment of living allowance show that they are actually part of the
perquisite of his elective position, hence, it is linked with his relations with the corporation. The question
of remuneration involving person who is not a mere employee but a stockholder and officer of a
corporation is not a simple labor problem but a matter that comes within the area of corporate affairs
and management, and is in fact a corporate controversy in contemplation of the Corporate Code