18.) RAUL C. COSARE V. BROADCOM ASIA, INC AND DANTE complaint for Cosare’s failure to establish his dismissal.

AREVALO • NLRC reversed the decision of the labor arbiter and found
GR No. 201298, February 5, 2014 Broadcom guilty of illegal dismissal.
Author: Gillian • CA said Labor arbiter had no jurisdiction he case involved an intra-
corporate controversy which, pursuant to PD 902-A, as amended,
DOCTRINE: was within the exclusive jurisdiction of the RTC
• The determination of whether the dismissed officer was a regular
employee or corporate officer unravels the conundrum" of whether a
complaint for illegal dismissal is cognizable by the LA or by the RTC. ISSUE:
"In case of the regular employee, the LA has jurisdiction; otherwise, 1. WON the case falls within the jurisdiction of the LA?
the RTC exercises the legal authority to adjudicate.
• There are two circumstances which must concur in order for an HELD: YES
individual to be considered a corporate officer, as against an RATIO:
ordinary employee or officer, namely: (1) the creation of the position
is under the corporation’s charter or by-laws; and (2) the election of As regards the issue of jurisdiction, the Court has determined that
the officer is by the directors or stockholders contrary to the ruling of the CA, it is the LA, and not the regular courts,
which has the original jurisdiction over the subject controversy. An
FACTS: intra-corporate controversy, which falls within the jurisdiction of
• Cosare, was employed as a salesman by Arevalo, who was then in regular courts, has been regarded in its broad sense to pertain to
the business of selling broadcast equipment needed by television disputes that involve any of the following relationships: (1) between
networks and production houses. In December 2000, Arevalo set up the corporation, partnership or association and the public; (2) between
the company Broadcom, still to continue the business of trading the corporation, partnership or association and the state in so far as
communication and broadcast equipment. Cosare was named an its franchise, permit or license to operate is concerned; (3) between
incorporator of Broadcom, having been assigned 100 shares of the corporation, partnership or association and its stockholders,
stock with par value of P1.00 per share. In October 2001, Cosare partners, members or officers; and (4) among the stockholders,
was promoted to the position of Assistant Vice President for Sales partners or associates, themselves. Settled jurisprudence, however,
(AVP for Sales) and Head of the Technical Coordination. qualifies that when the dispute involves a charge of illegal dismissal,
• On March 30, 2009, Cosare received from Roselyn Villareal the action may fall under the jurisdiction of the LAs upon whose
(Villareal), Broadcom’s Manager for Finance and Administration, a jurisdiction, as a rule, falls termination disputes and claims for
memo signed by Arevalo, charging him of serious misconduct and damages arising from employer-employee relations as provided in
willful breach of trust. Article 217 of the Labor Code. Consistent with this jurisprudence, the
• On April 2, 2009, Cosare attempted to furnish the company with a mere fact that Cosare was a stockholder and an officer of Broadcom
Memo by which he addressed and denied the accusations cited in at the time the subject controversy developed failed to necessarily
Arevalo’s memo dated March 30, 2009. The respondents refused to make the case an intra-corporate dispute.
receive the memo on the ground of late filing, prompting Cosare to
serve a copy thereof by registered mail. The following day Cosare In Matling Industrial and Commercial Corporation v. Coros, the Court
filed the subject labor complaint, claiming that he was constructively distinguished between a "regular employee" and a "corporate officer"
dismissed from employment by the respondents. He further argued for purposes of establishing the true nature of a dispute or complaint
that he was illegally suspended, as he placed no serious and for illegal dismissal and determining which body has jurisdiction over
imminent threat to the life or property of his employer and co- it. Succinctly, it was explained that "[t]he determination of whether the
employees. dismissed officer was a regular employee or corporate officer unravels
• Labor arbiter ruled in favor of Broadcom and dismissed the the conundrum" of whether a complaint for illegal dismissal is
cognizable by the LA or by the RTC. "In case of the regular employee, Although a blanket authority provides for the Board’s appointment of
the LA has jurisdiction; otherwise, the RTC exercises the legal such other officers as it may deem necessary and proper, the
authority to adjudicate. respondents failed to sufficiently establish that the position of AVP for
Sales was created by virtue of an act of Broadcom’s board, and that
Applying the foregoing to the present case, the LA had the original Cosare was specifically elected or appointed to such position by the
jurisdiction over the complaint for illegal dismissal because Cosare, directors. No board resolutions to establish such facts form part of the
although an officer of Broadcom for being its AVP for Sales, was not a case records. Further, it was held in Marc II Marketing, Inc. v. Joson
"corporate officer" as the term is defined by law. We emphasized in that an enabling clause in a corporation’s by-laws empowering its
Real v. Sangu Philippines, Inc. the definition of corporate officers for board of directors to create additional officers, even with the
the purpose of identifying an intra-corporate controversy. Citing subsequent passage of a board resolution to that effect, cannot make
Garcia v. Eastern Telecommunications Philippines, Inc., we held: such position a corporate office. The board of directors has no power
to create other corporate offices without first amending the corporate
" ‘Corporate officers’ in the context of Presidential Decree No. 902-A by-laws so as to include therein the newly created corporate
are those officers of the corporation who are given that character by office. "To allow the creation of a corporate officer position by a simple
the Corporation Code or by the corporation’s by-laws. inclusion in the corporate by-laws of an enabling clause empowering
the board of directors to do so can result in the circumvention of that
In Tabang v. NLRC,35 the Court also made the following constitutionally well-protected right [of every employee to security of
pronouncement on the nature of corporate offices: tenure.

It has been held that an "office" is created by the charter of the

corporation and the officer is elected by the directors and
stockholders.

As may be deduced from the foregoing, there are two circumstances

which must concur in order for an individual to be considered a
corporate officer, as against an ordinary employee or officer, namely:
(1) the creation of the position is under the corporation’s charter or by-
laws; and (2) the election of the officer is by the directors or
stockholders. It is only when the officer claiming to have been illegally
dismissed is classified as such corporate officer that the issue is
deemed an intra-corporate dispute which falls within the jurisdiction of
the trial courts.

To support their argument that Cosare was a corporate officer, the

respondents referred to Section 1, Article IV of Broadcom’s by-laws,
which reads:

Section 1. Election / Appointment –…the Board may, from time to

time, appoint such other officers as it may determine to be necessary
or proper….