G.R. No. 118088 November 23, 1995
Mainland Construction Co., Inc., et al., petitioners, vs. Mila Movilla, et al., and the Honorable Commissioner of the NLRC-5th Division, respondents.

FACTS

Ernesto Movilla was hired by petitioner Mainland Construction Co., Inc. in 1977 as a Certified Public Accountant and was later promoted to Administrative Officer. He was registered with the SSS, and contributions were deducted from his salary. In 1987, he was elected to the Board of Directors and subsequently appointed as Administrative Manager by the Board. A 1991 DOLE inspection found labor standard violations by the company, resulting in an order for Mainland to pay monetary claims to thirteen employees, including Movilla. Mainland paid all except Movilla.
Movilla filed a complaint for unpaid wages and separation pay before the Labor Arbiter. He died during the proceedings and was substituted by his heirs. The Labor Arbiter dismissed the case for lack of jurisdiction, ruling that as a corporate officer, his claims constituted an intra-corporate dispute falling under the exclusive jurisdiction of the Securities and Exchange Commission (SEC). The NLRC reversed this decision, holding that the case involved a labor dispute over unpaid compensation and ordered petitioners to pay the claims.

ISSUE

Whether the NLRC or the SEC has jurisdiction over Movilla’s complaint for unpaid wages and separation pay.

RULING

The Supreme Court ruled that the NLRC has jurisdiction. The legal logic hinges on the determination of the employer-employee relationship, which is a factual question. The Court found that Movilla was primarily an employee of the corporation. His SSS registration and the deduction of contributions were indicative of an employer-employee relationship. His subsequent election as a director and appointment as Administrative Manager did not automatically negate this status. A corporate officer can simultaneously be an employee if performing duties under an employer-employee arrangement.
The claims for unpaid salaries and separation pay are rooted in this employment relationship and constitute a labor dispute, not an intra-corporate controversy concerning corporate governance or internal administration. The DOLE inspection order, which included Movilla among the employees to be paid, further substantiated this relationship. Since the case involves the enforcement of labor standards and benefits arising from employment, jurisdiction properly lies with the NLRC under Article 217 of the Labor Code. The NLRC did not commit grave abuse of discretion in assuming jurisdiction and deciding the case on its merits.