G.R. No. 202974 - Cacho vs. Balagtas

Virginia D. Balagtas filed a complaint for constructive dismissal against North Star International Travel, Inc. and its President, Norma D. Cacho.
Balagtas claimed to be a former employee and one of the original incorporators and directors of North Star, serving as General Manager and later as Executive Vice President/Chief Executive Officer.
On March 19, 2004, Balagtas was placed under a 30-day preventive suspension due to alleged questionable transactions.
She was notified of her suspension and ordered to explain her actions but was subsequently prevented from resuming her position.
Balagtas filed a complaint claiming constructive and illegal dismissal effective April 12, 2004.

North Star and Cacho argued that Balagtas was suspended due to questionable transactions and that the suspension was necessary to protect the corporation's interests.
They contended that Balagtas violated her suspension by attempting to work during this period.
The respondents maintained that Balagtas was not illegally dismissed but was merely suspended.

The Labor Arbiter ruled that Balagtas was illegally dismissed and ordered North Star to pay her separation pay, back wages, moral and exemplary damages, and attorney's fees.
The respondents appealed the decision, claiming that Balagtas's complaint fell under the jurisdiction of ordinary courts due to her status as a corporate officer.

The NLRC reversed the Labor Arbiter's decision, stating that Balagtas was a corporate officer and that her dismissal constituted an intra-corporate controversy, thus falling under the jurisdiction of the Regional Trial Court.
The NLRC found that Balagtas had admitted to being a corporate officer and that her position was recognized in the corporation's by-laws.

The Court of Appeals granted Balagtas's petition, reversing the NLRC's ruling and affirming the Labor Arbiter's decision.
The appellate court applied a two-tier test to determine the nature of the controversy, concluding that no intra-corporate relationship existed between Balagtas and North Star.
The court emphasized that Balagtas's position as Executive Vice President did not confer upon her the status of a corporate officer as defined by the by-laws.

Petitioners questioned whether Balagtas was a corporate officer as defined by the Corporation Code and North Star's by-laws.
They also challenged the appellate court's decision to reverse the NLRC's finding regarding Balagtas's status and the appropriateness of the damages awarded.

Petitioners argued that Balagtas was indeed a corporate officer and that her dismissal was an intra-corporate matter.
They cited the by-laws and previous appointments to support their claim that Balagtas held a corporate office.

Balagtas contended that she was not a corporate officer and that the documents supporting petitioners' claims were falsified.
She maintained that her position was merely titular and that her claims constituted a labor dispute, not an intra-corporate controversy.

The Supreme Court found merit in the petition, agreeing that the case constituted an intra-corporate controversy.
The Court applied the two-tier test to determine the nature of the relationshi...continue reading