Supreme Court

Manila

THIRD DIVISION

MATLING INDUSTRIAL G.R. No. 157802

AND COMMERCIAL
CORPORATION, Present:
RICHARD K. SPENCER,
CATHERINE SPENCER, CARPIO MORALES, Chairperson,
AND ALEX MANCILLA, BRION,
Petitioners, BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.
-versus -
Promulgated:
RICARDO R. COROS, October 13, 2010
Respondent.
x-----------------------------------------------------------------------------------------x

DECISION

BERSAMIN, J.:
This case reprises the jurisdictional conundrum of whether a complaint for illegal
dismissal is cognizable by the Labor Arbiter (LA) or by the Regional Trial Court (RTC). The
determination of whether the dismissed officer was a regular employee or a corporate officer
unravels the conundrum. In the case of the regular employee, the LA has jurisdiction; otherwise,
the RTC exercises the legal authority to adjudicate.

In this appeal via petition for review on certiorari, the petitioners challenge the decision
dated September 13, 2002[1] and the resolution dated April 2, 2003,[2] both promulgated in C.A.-
G.R. SP No. 65714 entitled Matling Industrial and Commercial Corporation, et al. v. Ricardo
R. Coros and National Labor Relations Commission, whereby by the Court of Appeals (CA)
sustained the ruling of the National Labor Relations Commission (NLRC) to the effect that the
LA had jurisdiction because the respondent was not a corporate officer of petitioner Matling
Industrial and Commercial Corporation (Matling).

Antecedents

After his dismissal by Matling as its Vice President for Finance and Administration, the
respondent filed on August 10, 2000 a complaint for illegal suspension and illegal dismissal
against Matling and some of its corporate officers (petitioners) in the NLRC, Sub-Regional
Arbitration Branch XII, Iligan City.[3]

The petitioners moved to dismiss the complaint,[4] raising the ground, among others, that
the complaint pertained to the jurisdiction of the Securities and Exchange Commission (SEC)
due to the controversy being intra-corporate inasmuch as the respondent was a member of
Matlings Board of Directors aside from being its Vice-President for Finance and Administration
prior to his termination.
The respondent opposed the petitioners motion to dismiss,[5] insisting that his status as a member
of Matlings Board of Directors was doubtful, considering that he had not been formally elected
as such; that he did not own a single share of stock in Matling, considering that he had been
made to sign in blank an undated indorsement of the certificate of stock he had been given in
1992; that Matling had taken back and retained the certificate of stock in its custody; and that
even assuming that he had been a Director of Matling, he had been removed as the Vice
President for Finance and Administration, not as a Director, a fact that the notice of his
termination dated April 10, 2000 showed.

On October 16, 2000, the LA granted the petitioners motion to dismiss,[6] ruling that the
respondent was a corporate officer because he was occupying the position of Vice President for
Finance and Administration and at the same time was a Member of the Board of Directors of
Matling; and that, consequently, his removal was a corporate act of Matling and the controversy
resulting from such removal was under the jurisdiction of the SEC, pursuant to Section 5,
paragraph (c) of Presidential Decree No. 902.

Ruling of the NLRC

The respondent appealed to the NLRC,[7] urging that:

I
THE HONORABLE LABOR ARBITER COMMITTED GRAVE ABUSE OF DISCRETION
GRANTING APPELLEES MOTION TO DISMISS WITHOUT GIVING THE APPELLANT
AN OPPORTUNITY TO FILE HIS OPPOSITION THERETO THEREBY VIOLATING THE
BASIC PRINCIPLE OF DUE PROCESS.

II
THE HONORABLE LABOR ARBITER COMMITTED AN ERROR IN DISMISSING THE
CASE FOR LACK OF JURISDICTION.

On March 13, 2001, the NLRC set aside the dismissal, concluding that the
respondents complaint for illegal dismissal was properly cognizable by the LA, not by the SEC,
because he was not a corporate officer by virtue of his position in Matling, albeit high ranking
and managerial, not being among the positions listed in Matlings Constitution and By-Laws.
[8]
The NLRC disposed thuswise:

WHEREFORE, the Order appealed from is SET ASIDE. A new one is entered declaring and
holding that the case at bench does not involve any intracorporate matter. Hence, jurisdiction to
hear and act on said case is vested with the Labor Arbiter, not the SEC, considering that the
position of Vice-President for Finance and Administration being held by complainant-appellant is
not listed as among respondent's corporate officers.

Accordingly, let the records of this case be REMANDED to the Arbitration Branch of origin in
order that the Labor Arbiter below could act on the case at bench, hear both parties, receive their
respective evidence and position papers fully observing the requirements of due process, and
resolve the same with reasonable dispatch.
SO ORDERED.

The petitioners sought reconsideration,[9] reiterating that the respondent, being a member of the
Board of Directors, was a corporate officer whose removal was not within the LAs jurisdiction.
 The petitioners later submitted to the NLRC in support of the motion for
reconsideration the certified machine copies of Matlings Amended Articles of Incorporation
and By Laws to prove that the President of Matling was thereby granted full power to create
new offices and appoint the officers thereto, and the minutes of special meeting held on June 7,
1999 by Matlings Board of Directors to prove that the respondent was, indeed, a Member of the
Board of Directors.[10]

Nonetheless, on April 30, 2001, the NLRC denied the petitioners motion for
reconsideration.[11]

Ruling of the CA

The petitioners elevated the issue to the CA by petition for certiorari, docketed as C.A.-G.R.
No. SP 65714, contending that the NLRC committed grave abuse of discretion amounting to
lack of jurisdiction in reversing the correct decision of the LA.

In its assailed decision promulgated on September 13, 2002,[12] the CA dismissed the petition
for certiorari, explaining:

For a position to be considered as a corporate office, or, for that matter, for one to be considered
as a corporate officer, the position must, if not listed in the by-laws, have been created by the
corporation's board of directors, and the occupant thereof appointed or elected by the same board
of directors or stockholders. This is the implication of the ruling in Tabang v. National Labor
Relations Commission, which reads:
The president, vice president, secretary and treasurer are commonly regarded as the
principal or executive officers of a corporation, and modern corporation statutes usually
designate them as the officers of the corporation. However, other offices 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.
It has been held that 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'
usually occupies no office and generally is employed not by 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.
This ruling was reiterated in the subsequent cases of Ongkingco v. National Labor
Relations Commission and De Rossi v. National Labor Relations Commission.
The position of vice-president for administration and finance, which Coros used to hold in
the corporation, was not created by the corporations board of directors but only by its president
or executive vice-president pursuant to the by-laws of the corporation. Moreover, Coros
appointment to said position was not made through any act of the board of directors
or stockholders of the corporation. Consequently, the position to which Coros was appointed and
later on removed from, is not a corporate office despite its nomenclature, but an ordinary office
in the corporation.
Coros alleged illegal dismissal therefrom is, therefore, within the jurisdiction of the labor
arbiter.
WHEREFORE, the petition for certiorari is hereby DISMISSED.
SO ORDERED.
The CA denied the petitioners motion for reconsideration on April 2, 2003.[13]

Issue
 Thus, the petitioners are now before the Court for a review on certiorari, positing that the
respondent was a stockholder/member of the Matlings Board of Directors as well as its Vice
President for Finance and Administration; and that the CA consequently erred in holding that
the LA had jurisdiction.

The decisive issue is whether the respondent was a corporate officer of Matling or not. The
resolution of the issue determines whether the LA or the RTC had jurisdiction over
his complaint for illegal dismissal.

Ruling

The appeal fails.

I
The Law on Jurisdiction in Dismissal Cases

As a rule, the illegal dismissal of an officer or other employee of a private employer is

properly cognizable by the LA. This is pursuant to Article 217 (a) 2 of the Labor Code, as
amended, which provides as follows:

Article 217. Jurisdiction of the Labor Arbiters and the Commission. - (a) Except as
otherwise provided under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case
by the parties for decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts; and

6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for reinstatement.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided
by Labor Arbiters.

(c) Cases arising from the interpretation or implementation of collective bargaining

agreements and those arising from the interpretation or enforcement of company personnel
policies shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements. (As amended by
Section 9, Republic Act No. 6715, March 21, 1989).
 Where the complaint for illegal dismissal concerns a corporate officer, however, the
controversy falls under the jurisdiction of the Securities and Exchange Commission (SEC),
because the controversy arises out of intra-corporate or partnership relations between and
among stockholders, members, or associates, or between any or all of them and the corporation,
partnership, or association of which they are stockholders, members, or associates, respectively;
and between such corporation, partnership, or association and the State insofar as the
controversy concerns their individual franchise or right to exist as such entity; or because the
controversy involves the election or appointment of a director, trustee, officer, or manager of
such corporation, partnership, or association.[14] Such controversy, among others, is known as an
intra-corporate dispute.

Effective on August 8, 2000, upon the passage of Republic Act No. 8799,[15] otherwise
known as The Securities Regulation Code, the SECs jurisdiction over all intra-corporate
disputes was transferred to the RTC, pursuant to Section 5.2 of RA No. 8799, to wit:

5.2. The Commissions jurisdiction over all cases enumerated under Section 5
of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction
or the appropriate Regional Trial Court: Provided, that the Supreme Court in the exercise of
its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over
these cases. The Commission shall retain jurisdiction over pending cases involving intra-
corporate disputes submitted for final resolution which should be resolved within one (1)
year from the enactment of this Code. The Commission shall retain jurisdiction over pending
suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.

Considering that the respondents complaint for illegal dismissal was commenced on
August 10, 2000, it might come under the coverage of Section 5.2 of RA No. 8799, supra,
should it turn out that the respondent was a corporate, not a regular, officer of Matling.

II
Was the Respondents Position of Vice President
for Administration and Finance a Corporate Office?

We must first resolve whether or not the respondents position as Vice President for Finance and
Administration was a corporate office. If it was, his dismissal by the Board of Directors
rendered the matter an intra-corporate dispute cognizable by the RTC pursuant to RA No. 8799.

The petitioners contend that the position of Vice President for Finance and Administration was
a corporate office, having been created by Matlings President pursuant to By-Law No. V, as
amended,[16] to wit:

BY LAW NO. V

Officers

The President shall be the executive head of the corporation; shall preside over the meetings of
the stockholders and directors; shall countersign all certificates, contracts and other instruments
of the corporation as authorized by the Board of Directors; shall have full power to hire and
discharge any or all employees of the corporation; shall have full power to create new offices
and to appoint the officers thereto as he may deem proper and necessary in the operations
of the corporation and as the progress of the business and welfare of the corporation may
demand; shall make reports to the directors and stockholders and perform all such other duties
 and functions as are incident to his office or are properly required of him by the Board of
Directors. In case of the absence or disability of the President, the Executive Vice President shall
have the power to exercise his functions.

The petitioners argue that the power to create corporate offices and to appoint the
individuals to assume the offices was delegated by Matlings Board of Directors to its President
through By-Law No. V, as amended; and that any office the President created, like the position
of the respondent, was as valid and effective a creation as that made by the Board of Directors,
making the office a corporate office. In justification, they cite Tabang v. National Labor
Relations Commission,[17] which held that other offices 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 officers as may be necessary.
The respondent counters that Matlings By-Laws did not list his position as Vice President for
Finance and Administration as one of the corporate offices; that Matlings By-Law No. III listed
only four corporate officers, namely: President, Executive Vice President, Secretary, and
Treasurer; [18] that the corporate offices contemplated in the phrase and such other officers as
may be provided for in the by-laws found in Section 25 of the Corporation Code should be
clearly and expressly stated in the By-Laws; that the fact that Matlings By-Law No. III dealt
with Directors & Officers while its By-Law No. V dealt with Officers proved that there was a
differentiation between the officers mentioned in the two provisions, with those classified under
By-Law No. V being ordinary or non-corporate officers; and that the officer, to be considered
as a corporate officer, must be elected by the Board of Directors or the stockholders, for the
President could only appoint an employee to a position pursuant to By-Law No. V.

We agree with respondent.

Section 25 of the Corporation Code provides:

Section 25. Corporate officers, quorum.--Immediately after their election, the directors of a
corporation must formally organize by the election of a president, who shall be a director, a
treasurer who may or may not be a director, a secretary who shall be a resident and citizen of
the Philippines, and such other officers as may be provided for in the by-laws. Any two (2) or
more positions may be held concurrently by the same person, except that no one shall act as
president and secretary or as president and treasurer at the same time.
The directors or trustees and officers to be elected shall perform the duties enjoined on
them by law and the by-laws of the corporation. Unless the articles of incorporation or the by-
laws provide for a greater majority, a majority of the number of directors or trustees as fixed in
the articles of incorporation shall constitute a quorum for the transaction of corporate business,
and every decision of at least a majority of the directors or trustees present at a meeting at which
there is a quorum shall be valid as a corporate act, except for the election of officers which shall
require the vote of a majority of all the members of the board.

Directors or trustees cannot attend or vote by proxy at board meetings.

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,[19] 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 or subordinate officials. Thus, it was held
in Easycall Communications Phils., Inc. v. King:[20]

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.

In this case, respondent was appointed vice president for nationwide expansion by Malonzo,
petitioner's general manager, not by the board of directors of petitioner. It was also Malonzo who
determined the compensation package of respondent. Thus, respondent was an employee, not a
corporate officer. The CA was therefore correct in ruling that jurisdiction over the case was
properly with the NLRC, not the SEC (now the RTC).

This interpretation is the correct application of Section 25 of the Corporation Code,

which plainly states that the corporate officers are the President, Secretary, Treasurer and such
other officers as may be provided for in the By-Laws. Accordingly, the corporate officers in the
context of PD No. 902-A are exclusively those who are given that character either by
the Corporation Code or by the corporations By-Laws.

A different interpretation can easily leave the way open for the Board of Directors to
circumvent the constitutionally guaranteed security of tenure of the employee by the expedient
inclusion in the By-Laws of an enabling clause on the creation of just any corporate officer
position.

It is relevant to state in this connection that the SEC, the primary agency administering
the Corporation Code, adopted a similar interpretation of Section 25 of the Corporation
Code in its Opinion dated November 25, 1993,[21] to wit:

Thus, pursuant to the above provision (Section 25 of the Corporation Code), whoever are
the corporate officers enumerated in the by-laws are the exclusive Officers of the
corporation and the Board has no power to create other Offices without amending first the
corporate By-laws. However, the Board may create appointive positions other than the
positions of corporate Officers, but the persons occupying such positions are not considered
as corporate officers within the meaning of Section 25 of the Corporation Code and are not
empowered to exercise the functions of the corporate Officers, except those functions
lawfully delegated to them. Their functions and duties are to be determined by the Board of
Directors/Trustees.

Moreover, the Board of Directors of Matling could not validly delegate the power to
create a corporate office to the President, in light of Section 25 of the Corporation
Code requiring the Board of Directors itself to elect the corporate officers. Verily, the power to
elect the corporate officers was a discretionary power that the law exclusively vested in the
Board of Directors, and could not be delegated to subordinate officers or agents. [22] The office of
Vice President for Finance and Administration created by Matlings President pursuant to By
Law No. V was an ordinary, not a corporate, office.

To emphasize, the power to create new offices and the power to appoint the officers to occupy
them vested by By-Law No. V merely allowed Matlings President to create non-corporate
offices to be occupied by ordinary employees of Matling. Such powers were incidental to the
Presidents duties as the executive head of Matling to assist him in the daily operations of the
business.
The petitioners reliance on Tabang, supra, is misplaced. The statement in Tabang, to the effect
that offices not expressly mentioned in the By-Laws but were created pursuant to a By-Law
enabling provision were also considered corporate offices, was plainly obiter dictum due to the
position subject of the controversy being mentioned in the By-Laws. Thus, the Court held
therein that the position was a corporate office, and that the determination of the rights and
liabilities arising from the ouster from the position was an intra-corporate controversy within
the SECs jurisdiction.

In Nacpil v. Intercontinental Broadcasting Corporation,[23] which may be the more appropriate

ruling, the position subject of the controversy was not expressly mentioned in the By-Laws, but
was created pursuant to a By-Law enabling provision authorizing the Board of Directors to
create other offices that the Board of Directors might see fit to create. The Court held there that
the position was a corporate office, relying on the obiter dictum in Tabang.
Considering that the observations earlier made herein show that the soundness of their dicta is
not unassailable, Tabang and Nacpil should no longer be controlling.

III
Did Respondents Status as Director and
Stockholder Automatically Convert his Dismissal
into an Intra-Corporate Dispute?

Yet, the petitioners insist that because the respondent was a Director/stockholder of Matling,
and relying on Paguio v. National Labor Relations Commission [24] and Ongkingko v. National
Labor Relations Commission,[25] the NLRC had no jurisdiction over his complaint, considering
that any case for illegal dismissal brought by a stockholder/officer against the corporation was
an intra-corporate matter that must fall under the jurisdiction of the SEC conformably with the
context of PD No. 902-A.

The petitioners insistence is bereft of basis.

To begin with, the reliance on Paguio and Ongkingko is misplaced. In both rulings, the
complainants were undeniably corporate officers due to their positions being expressly
mentioned in the By-Laws, aside from the fact that both of them had been duly elected by the
respective Boards of Directors. But the herein respondents position of Vice President for
Finance and Administration was not expressly mentioned in the By-Laws; neither was the
position of Vice President for Finance and Administration created by Matlings Board of
Directors. Lastly, the President, not the Board of Directors, appointed him.

True it is that the Court pronounced in Tabang as follows:

Also, an intra-corporate controversy is one which arises between a stockholder and the
corporation. There is no distinction, qualification or any exemption whatsoever. The provision is
broad and covers all kinds of controversies between stockholders and corporations.[26]

However, the Tabang pronouncement is not controlling because it is too sweeping and does not
accord with reason, justice, and fair play. In order to determine whether a dispute constitutes an
intra-corporate controversy or not, the Court considers two elements instead, namely: (a) the
status or relationship of the parties; and (b) the nature of the question that is the subject of their
controversy. This was our thrust in Viray v. Court of Appeals:[27]

The establishment of any of the relationships mentioned above will not necessarily always confer
jurisdiction over the dispute on the SEC to the exclusion of regular courts. The statement made in
one case that the rule admits of no exceptions or distinctions is not that absolute. The better
policy in determining which body has jurisdiction over a case would be to consider not only the
status or relationship of the parties but also the nature of the question that is the subject of their
controversy.

Not every conflict between a corporation and its stockholders involves corporate matters that
only the SEC can resolve in the exercise of its adjudicatory or quasi-judicial powers. If, for
example, a person leases an apartment owned by a corporation of which he is a stockholder,
there should be no question that a complaint for his ejectment for non-payment of rentals would
still come under the jurisdiction of the regular courts and not of the SEC. By the same token, if
one person injures another in a vehicular accident, the complaint for damages filed by the victim
will not come under the jurisdiction of the SEC simply because of the happenstance that both
parties are stockholders of the same corporation. A contrary interpretation would dissipate the
powers of the regular courts and distort the meaning and intent of PD No. 902-A.

In another case, Mainland Construction Co., Inc. v. Movilla,[28] the Court reiterated these
determinants thuswise:
In order that the SEC (now the regular courts) can take cognizance of a case, the controversy
must pertain to any of the following relationships:

a) between the corporation, partnership or association and the public;

b) between the corporation, partnership or association and its stockholders, partners,

members or officers;
c) between the corporation, partnership or association and the State as far as its franchise,
permit or license to operate is concerned; and
d) among the stockholders, partners or associates themselves.
The fact that the parties involved in the controversy are all stockholders or that the parties
involved are the stockholders and the corporation does not necessarily place the dispute within
the ambit of the jurisdiction of SEC. The better policy to be followed in determining jurisdiction
over a case should be to consider concurrent factors such as the status or relationship of the
parties or the nature of the question that is the subject of their controversy. In the absence of any
one of these factors, the SEC will not have jurisdiction. Furthermore, it does not necessarily
follow that every conflict between the corporation and its stockholders would involve such
corporate matters as only the SEC can resolve in the exercise of its adjudicatory or quasi-judicial
powers.[29]

The criteria for distinguishing between corporate officers who may be ousted from office
at will, on one hand, and ordinary corporate employees who may only be terminated for just
cause, on the other hand, do not depend on the nature of the services performed, but on the
manner of creation of the office. In the respondents case, he was supposedly at once an
employee, a stockholder, and a Director of Matling. The circumstances surrounding his
appointment to office must be fully considered to determine whether the dismissal constituted
an intra-corporate controversy or a labor termination dispute. We must also consider whether his
status as Director and stockholder had any relation at all to his appointment and subsequent
dismissal as Vice President for Finance and Administration.
Obviously enough, the respondent was not appointed as Vice President for Finance and
Administration because of his being a stockholder or Director of Matling. He had started
working for Matling on September 8, 1966, and had been employed continuously for 33 years
until his termination on April 17, 2000, first as a bookkeeper, and his climb in 1987 to his last
position as Vice President for Finance and Administration had been gradual but steady, as the
following sequence indicates:

1966 Bookkeeper
1968 Senior Accountant
1969 Chief Accountant
1972 Office Supervisor
1973 Assistant Treasurer
1978 Special Assistant for Finance
1980 Assistant Comptroller
1983 Finance and Administrative Manager
1985 Asst. Vice President for Finance and Administration
1987 to April 17, 2000 Vice President for Finance and Administration

Even though he might have become a stockholder of Matling in 1992, his promotion to
the position of Vice President for Finance and Administration in 1987 was by virtue of the
length of quality service he had rendered as an employee of Matling. His subsequent acquisition
of the status of Director/stockholder had no relation to his promotion. Besides, his status of
Director/stockholder was unaffected by his dismissal from employment as Vice President for
Finance and Administration.
In Prudential Bank and Trust Company v. Reyes,[30] a case involving a lady bank manager
who had risen from the ranks but was dismissed, the Court held that her complaint for illegal
dismissal was correctly brought to the NLRC, because she was deemed a regular employee of
the bank. The Court observed thus:

It appears that private respondent was appointed Accounting Clerk by the Bank on July 14,
1963. From that position she rose to become supervisor. Then in 1982, she was appointed
Assistant Vice-President which she occupied until her illegal dismissal on July 19, 1991. The
banks contention that she merely holds an elective position and that in effect she is not a
regular employee is belied by the nature of her work and her length of service with the
Bank. As earlier stated, she rose from the ranks and has been employed with the Bank since
1963 until the termination of her employment in 1991. As Assistant Vice President of the
Foreign Department of the Bank, she is tasked, among others, to collect checks drawn against
overseas banks payable in foreign currency and to ensure the collection of foreign bills or checks
purchased, including the signing of transmittal letters covering the same. It has been stated that
the primary standard of determining regular employment is the reasonable connection between
the particular activity performed by the employee in relation to the usual trade or business of the
employer. Additionally, an employee is regular because of the nature of work and the length of
service, not because of the mode or even the reason for hiring them. As Assistant Vice-President
of the Foreign Department of the Bank she performs tasks integral to the operations of the bank
and her length of service with the bank totaling 28 years speaks volumes of her status as a regular
employee of the bank. In fine, as a regular employee, she is entitled to security of tenure; that is,
her services may be terminated only for a just or authorized cause. This being in truth a case of
illegal dismissal, it is no wonder then that the Bank endeavored to the very end to establish loss
of trust and confidence and serious misconduct on the part of private respondent but, as will be
discussed later, to no avail.

WHEREFORE, we deny the petition for review on certiorari, and affirm the decision of the
Court of Appeals.
Costs of suit to be paid by the petitioners.

SO ORDERED.